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CREDIT AGREEMENT
DATED AS OF APRIL 30, 1999,
AMONG
HUB GROUP, INC.
HUB CITY TERMINALS, INC.,
HUB HOLDINGS, INC.
THE LENDERS
PARTY HERETO,
AND
XXXXXX TRUST AND SAVINGS BANK,
INDIVIDUALLY AND AS AGENT
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TABLE OF CONTENTS
SECTION HEADING PAGE
SECTION 1. THE CREDITS.................................................1
Section 1.1. Revolving Credit............................................1
Section 1.2. Revolving Credit Loans......................................1
Section 1.3. Term Credit.................................................2
Section 1.4. Letters of Credit...........................................2
Section 1.5. Manner and Disbursement of Loans............................5
Section 1.6. The Swing Line..............................................6
Section 1.7. Appointment of Borrowers as Agents for Each Borrower........9
Section 1.8. Guaranty Agreements.........................................9
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES........................9
Section 2.1. Interest Rate Options.......................................9
Section 2.2. Minimum LIBOR Portion Amounts.............................11
Section 2.3. Computation of Interest....................................11
Section 2.4. Manner of Rate Selection...................................11
Section 2.5. Change of Law..............................................11
Section 2.6. Unavailability of Deposits or Inability to Ascertain
Adjusted LIBOR.........................................11
Section 2.7. Taxes and Increased Costs..................................12
Section 2.8. Change in Capital Adequacy Requirements....................13
Section 2.9. Funding Indemnity..........................................13
Section 2.10. Lending Branch.............................................14
Section 2.11. Discretion of Lenders as to Manner of Funding..............14
Section 2.12. Replacement of Affected Lenders............................14
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS, AND APPLICATIONS..........15
Section 3.1. Fees.......................................................15
Section 3.2. Voluntary Prepayments......................................15
Section 3.3. Mandatory Prepayments......................................16
Section 3.4. Reduction and Termination of Commitments...................17
Section 3.5. Place and Application of Payments..........................17
Section 3.6. Notations..................................................19
SECTION 4. DEFINITIONS; INTERPRETATION................................19
Section 4.1. Definitions................................................19
Section 4.2. Interpretation.............................................33
SECTION 5. REPRESENTATIONS AND WARRANTIES.............................34
Section 5.1. Organization and Qualification.............................34
Section 5.2. Corporate Authority and Validity of Obligations............34
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Section 5.3. Hub Group..................................................34
Section 5.4. Use of Proceeds; Margin Stock..............................35
Section 5.5. Financial Reports..........................................36
Section 5.6. No Material Adverse Change.................................36
Section 5.7. Full Disclosure............................................36
Section 5.8. Good Title.................................................36
Section 5.9. Litigation and Other Controversies.........................36
Section 5.10. Taxes......................................................36
Section 5.11. Approvals..................................................37
Section 5.12. Affiliate Transactions.....................................37
Section 5.13. Investment Company; Public Utility Holding Company.........37
Section 5.14. ERISA......................................................37
Section 5.15. Compliance with Laws.......................................37
Section 5.16. Other Agreements...........................................38
Section 5.17. Year 2000 Compliance.......................................38
SECTION 6. CONDITIONS PRECEDENT.......................................38
Section 6.1. All Advances...............................................38
Section 6.2. Initial Advance............................................39
SECTION 7. COVENANTS..................................................40
Section 7.1. Maintenance of Business....................................40
Section 7.2. Maintenance of Properties..................................41
Section 7.3. Taxes and Assessments......................................41
Section 7.4. Insurance..................................................41
Section 7.5. Financial Reports..........................................41
Section 7.6. Inspection.................................................43
Section 7.7. Net Worth..................................................43
Section 7.8. Fixed Charge Coverage Ratio................................43
Section 7.9. Minimum EBITDAM............................................44
Section 7.10. Cash Flow Leverage Ratio...................................44
Section 7.11. Indebtedness for Borrowed Money............................44
Section 7.12. Liens......................................................45
Section 7.13. Investments, Acquisitions, Loans, Advances and Guaranties..46
Section 7.14. Mergers, Consolidations and Sales..........................49
Section 7.15. Maintenance of Subsidiaries................................50
Section 7.16. Dividends By Public Hub Company............................51
Section 7.17. ERISA......................................................51
Section 7.18. Compliance with Laws.......................................51
Section 7.19. Burdensome Contracts With Affiliates.......................52
Section 7.20. No Changes in Fiscal Year..................................52
Section 7.21. Formation of Subsidiaries..................................52
Section 7.22. Change in the Nature of Business...........................52
Section 7.23. Guaranty...................................................52
Section 7.24. Interest Rate Protection...................................52
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Section 7.25. Year 2000 Assessment.......................................53
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.............................53
Section 8.1. Events of Default..........................................53
Section 8.2. Non-Bankruptcy Defaults....................................55
Section 8.3. Bankruptcy Defaults........................................55
Section 8.4. Collateral for Undrawn Letters of Credit...................55
SECTION 9. THE AGENT..................................................56
Section 9.1. Appointment and Authorization..............................56
Section 9.2. Rights as a Lender.........................................56
Section 9.3. Standard of Care...........................................56
Section 9.4. Costs and Expenses.........................................57
Section 9.5. Indemnity..................................................57
SECTION 10. JOINT AND SEVERAL LIABILITY AND GUARANTIES.................58
Section 10.1. Joint and Several Liability and Guaranties.................58
Section 10.2. Guaranty Unconditional.....................................58
Section 10.3. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances..........................................59
Section 10.4. Waivers....................................................59
Section 10.5. Limit on Recovery..........................................59
Section 10.6. Stay of Acceleration.......................................60
Section 10.7. Benefit to Guarantors......................................60
Section 10.8. Guarantor Covenants........................................60
SECTION 11. MISCELLANEOUS..............................................60
Section 11.1. Withholding Taxes..........................................60
Section 11.2. Non-Business Days..........................................61
Section 11.3. No Waiver, Cumulative Remedies.............................61
Section 11.4. Waivers, Modifications and Amendments......................62
Section 11.5. Costs and Expenses.........................................62
Section 11.6. Documentary Taxes..........................................62
Section 11.7. Survival of Representations................................63
Section 11.8. Survival of Indemnities....................................63
Section 11.9. Participations.............................................63
Section 11.10. Assignment Agreements......................................63
Section 11.11. Notices....................................................64
Section 11.12. Construction...............................................64
Section 11.13. Headings...................................................64
Section 11.14. Severability of Provisions.................................65
Section 11.15 Counterparts...............................................65
Section 11.16. Entire Understanding.......................................65
Section 11.17. Binding Nature, Governing Law, Etc.........................65
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Section 11.18. Submission to Jurisdiction; Waiver of Jury Trial...........65
Section 11.19. Confidentiality............................................65
Section 11.20. No Third Party Rights......................................67
Signature....................................................................67
Exhibit A-1 - Revolving Credit Note
Exhibit A-2 - Term Note
Exhibit A-3 - Swing Line Note
Exhibit B - Compliance Certificate
Exhibit C - Subsidiary Guaranty Agreement
Schedule 5.3 - Subsidiaries
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CREDIT AGREEMENT
To each of the Lenders party hereto
Ladies and Gentlemen:
The undersigned, Hub Group, Inc., a Delaware corporation (the "PUBLIC
HUB COMPANY"), Hub City Terminals, Inc., a Delaware corporation ("HUB CHICAGO"),
and Hub Holdings, Inc. a Delaware corporation ("HUB HOLDINGS") (Hub Chicago and
Hub Holdings and the Public Hub Company being hereinafter referred to
collectively as the "BORROWERS" and individually as a "BORROWER"), applies to
you (the "LENDERS") for your several commitments, subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, to make a revolving credit (the "REVOLVING CREDIT"), a
term credit (the "TERM CREDIT") and a swing line credit (the "SWING LINE")
available to the Borrowers, all as more fully hereinafter set forth.
SECTION 1. THE CREDITS.
SECTION 1.1. REVOLVING CREDIT. Subject to the terms and conditions
hereof, each Lender severally agrees to extend credit to the Borrowers under the
Revolving Credit which may be availed of by any Borrower from time to time
during the period from and including the date hereof to but not including the
Revolving Credit Termination Date, at which time the commitments of the Lenders
to extend credit under the Revolving Credit shall expire. The Revolving Credit
may be utilized by the Borrowers in the form of Revolving Credit Loans and
Letters of Credit, all as more fully hereinafter set forth, provided that the
aggregate principal amount of Revolving Credit Loans, Swing Loans and L/C
Obligations outstanding at any one time shall not exceed the Revolving Credit
Commitments then in effect. During the period from and including the date hereof
to but not including the Revolving Credit Termination Date, each Borrower may
use the Revolving Credit Commitments by borrowing, repaying and reborrowing
Revolving Credit Loans in whole or in part and/or by having the Agent issue
Letters of Credit, having such Letters of Credit expire or otherwise terminate
without having been drawn upon or, if drawn upon, reimbursing the Agent for each
such drawing, and having the Agent issue new Letters of Credit, all in
accordance with the terms and conditions of this Agreement. For purposes of this
Agreement, where a determination of the unused or available amount of the
Revolving Credit Commitments is necessary, the Revolving Credit Loans, Swing
Loans and Letters of Credit shall be deemed to utilize the Revolving Credit
Commitments. The obligations of the Lenders hereunder are several and not joint,
and no Lender shall under any circumstances be obligated to extend credit under
the Revolving Credit in excess of its Percentage of the Revolving Credit
Commitments.
SECTION 1.2. REVOLVING CREDIT LOANS. Subject to the terms and
conditions hereof, the Revolving Credit may be availed of by each Borrower in
the form of loans (individually a "REVOLVING CREDIT LOAN" and collectively the
"REVOLVING CREDIT LOANS"). Each Borrowing of Revolving Credit Loans shall be
made ratably by the Lenders in proportion to their respective Percentages. Each
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Borrowing of Revolving Credit Loans shall be in an amount of $100,000 or such
greater amount which is an integral multiple of $100,000; PROVIDED, HOWEVER,
that a Borrowing of Revolving Credit Loans which bears interest with reference
to the Adjusted LIBOR shall be in such greater amount as is required by Section
2.2 hereof. All Revolving Credit Loans made by a Lender shall be made against
and evidenced by a single Revolving Credit Note of the Borrowers, jointly and
severally, (individually a "REVOLVING CREDIT NOTE" and collectively the
"REVOLVING CREDIT NOTES") payable to the order of such Lender in the amount of
its Revolving Credit Commitment, with each Revolving Credit Note to be in the
form (with appropriate insertions) attached hereto as Exhibit A-1. Each
Revolving Credit Note shall be dated the date of issuance thereof, be expressed
to bear interest as set forth in Section 2 hereof, and be expressed to mature on
the Revolving Credit Termination Date. Without regard to the principal amount of
each Revolving Credit Note stated on its face, the actual principal amount at
any time outstanding and owing by the Borrowers on account thereof shall be the
sum of all advances then or theretofore made thereon less all payments of
principal actually received thereon.
SECTION 1.3. Subject to all of the terms and conditions hereof, the
Lenders severally agree to make term loans (individually a "TERM LOAN" and
collectively the "TERM LOANS") to Hub Holdings under the Term Credit in an
amount not to exceed the Lenders' Term Credit Commitments. The Term Loans shall
be disbursed in a single Borrowing made, if at all, on or before June 1, 1999,
at which time the commitments of the Lenders to make the Term Loans shall
expire. The Term Loans shall be made ratably by the Lenders in proportion to
their respective Percentages. Each Lender's Term Loan shall be evidenced by a
Term Note of the Borrowers, jointly and severally, (individually a "TERM NOTE"
and collectively the "TERM NOTES") payable to the order of such Lender in the
amount of its Term Loan, each Term Note to be in the form (with appropriate
insertions) attached hereto as Exhibit A-2. Each Term Note shall be expressed to
mature in installments, commencing on September 30, 1999 and continuing on the
last day of each calendar quarter occurring thereafter to and including the
final installment due on March 31, 2004, with the principal installments on the
Term Notes to equal (in the aggregate for all the Term Notes taken together)
$1,250,000 per installment through and including June 30, 2000; $1,500,000 per
installment through and including June 30, 2001; $2,000,000 per installment
through and including December 31, 2003; and with the final principal
installment on all the Term Notes to equal (in the aggregate for all the Term
Notes taken together) all principal not sooner paid; and the amount of each
installment due on the Term Note held by each Lender shall be equal to such
Lender's Percentage of such installment.
SECTION 1.4. LETTERS OF CREDIT.
(a) GENERAL TERMS. Subject to the terms and conditions hereof, the
Revolving Credit may be availed of by each Borrower in the form of standby and
commercial letters of credit issued by the Agent for the account of such
Borrower (individually a "LETTER OF CREDIT" and collectively the "LETTERS OF
CREDIT"), provided that the aggregate amount of L/C Obligations shall not at any
time exceed the L/C Commitment; PROVIDED that the aggregate amount of L/C
Obligations at any one time outstanding shall in no event exceed the difference
of the Revolving Credit Commitments then in effect and the amount of Revolving
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Credit Loans and Swing Loans then outstanding. If and to the extent any Letter
of Credit expires or otherwise terminates without having been drawn upon, the
availability under the Revolving Credit Commitments shall to such extent be
reinstated. Each Letter of Credit shall be issued by the Agent, but each Lender
shall be obligated to reimburse the Agent for such Lender's Percentage of the
amount of each draft drawn under a Letter of Credit in accordance with this
Section 1.4 and, accordingly, the L/C Obligations in respect of each Letter of
Credit shall be deemed to utilize the Revolving Credit Commitments of all
Lenders pro rata in accordance with each Lender's Percentage.
(b) TERM. Each Letter of Credit issued hereunder shall expire not later
than the earlier of (i) twelve (12) months from the date of issuance (or be
cancelable not later than twelve (12) months from the date of issuance and each
renewal) or (ii) the Revolving Credit Termination Date. In the event the Agent
issues any Letter of Credit with an expiration date that is automatically
extended unless the Agent gives notice that the expiration date will not so
extend beyond its then scheduled expiration date, the Agent will give such
notice of non-renewal before the time necessary to prevent such automatic
extension if before such required notice date (i) the expiration date of such
Letter of Credit if so extended would be after the Revolving Credit Termination
Date, (ii) the Revolving Credit Commitments have terminated or (iii) an Event of
Default exists and the Required Lenders have given the Agent instructions not to
so permit the extension of the expiration date of such Letter of Credit.
(c) GENERAL CHARACTERISTICS. Each Letter of Credit issued hereunder
shall be payable in U.S. Dollars, conform to the general requirements of the
Agent for the issuance of standby or commercial letters of credit, as the case
may be, as to form and substance, and be a letter of credit which the Agent may
lawfully issue.
(d) APPLICATIONS. At the time any Borrower requests a Letter of Credit
to be issued (or prior to the first issuance of a Letter of Credit in the case
of a continuing application), such Borrower shall execute and deliver to the
Agent an application for such Letter of Credit in the form then customarily
prescribed by the Agent (individually an "APPLICATION" and collectively the
"APPLICATIONS"). Subject to the other provisions of this subsection, the
obligation of such Borrower to reimburse the Agent for drawings under a Letter
of Credit shall be governed by the Application for such Letter of Credit.
Anything contained in the Applications to the contrary notwithstanding, (i) the
Borrowers shall be jointly and severally liable for all obligations in respect
of each Letter of Credit, (ii) in the event the Agent is not reimbursed by the
Borrowers for the amount the Agent pays on any draft drawn under a Letter of
Credit issued hereunder by 11:00 a.m. (Chicago time) on the date when such
drawing is paid, the obligation of the Borrowers to reimburse the Agent for the
amount of such draft paid shall bear interest (which the Borrowers hereby
jointly and severally promise to pay on demand) from and after the date the
draft is paid until payment in full thereof at a fluctuating rate per annum
determined by adding 2% to the Domestic Rate as from time to time in effect
(computed on the basis of a year of 365 days for the actual number of days
elapsed), (iii) the Borrowers shall pay fees in connection with each Letter of
Credit as set forth in Section 3 hereof, (iv) except as otherwise provided in
Section 3.3 hereof, prior to the occurrence of a Default or an Event of Default
the Agent will not call for additional collateral security for the L/C
Obligations, (v) except as otherwise provided in Section 3.3 hereof, prior to
the occurrence of a Default or an Event of Default the Agent will not call for
the funding of a Letter of Credit by the Borrowers prior to being presented with
a draft drawn thereunder (or, in the event the draft is a time draft, prior to
its due date) and (vi) the Agent will promptly notify the applicable Borrower of
the presentment to the Agent of any demand for payment by the Agent under any
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Letter of Credit, together with notice of the amount of such payment and the
date such payment shall be made. The reimbursement obligations of each Borrower
under this Section 1.4 shall be absolute, irrevocable and unconditional under
any and all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense. The Borrowers hereby irrevocably authorize the Agent to
charge, while any Event of Default is continuing, any of any Borrower's deposit
accounts maintained with the Agent for the amount necessary to reimburse the
Agent for any drafts drawn under Letters of Credit issued hereunder.
(e) CHANGE IN LAWS. If the Agent or any Lender shall determine in good
faith that any change in any applicable law, regulation or guideline (including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or any new law, regulation or guideline, or any interpretation
of any of the foregoing by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or other
authority having jurisdiction over the Agent or such Lender (whether or not
having the force of law), shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against the Letters of Credit, or the
Agent's or such Lender's or any Borrower's liability with respect
thereto; or
(ii) impose on the Agent or such Lender any penalty with
respect to the foregoing or any other condition regarding this
Agreement, the Applications or the Letters of Credit;
and the Agent or such Lender shall determine in good faith that the result of
any of the foregoing is to increase the actual cost (whether by incurring a cost
or adding to a cost) to the Agent or such Lender of issuing, maintaining or
participating in the Letters of Credit hereunder (without benefit of, or credit
for, any prorations, exemptions, credits or other offsets available under any
such laws, regulations, guidelines or interpretations thereof), then the
Borrowers shall pay within 15 days of demand to the Agent or such Lender from
time to time as specified by the Agent or such Lender such additional amounts as
the Agent or such Lender shall determine are sufficient to compensate and
indemnify it for such increased cost. If the Agent or any Lender makes such a
claim for compensation, it shall provide any Borrower (with a copy to the Agent
in the case of any Lender) a certificate setting forth the computation of the
increased cost as a result of any event mentioned herein in reasonable detail
and such certificate shall constitute prima facie evidence if reasonably
determined.
(f) PARTICIPATIONS IN LETTERS OF CREDIT. Each Lender shall participate
on a pro rata basis in accordance with its Percentage in the Letters of Credit
issued by the Agent, which participation shall automatically arise upon the
issuance of each Letter of Credit. Subject to Section 1.5(b) hereof, each Lender
unconditionally agrees that in the event the Agent is not immediately reimbursed
by a Borrower for the amount paid by the Agent on any draft presented under a
Letter of Credit, then in that event such Lender shall pay to the Agent such
Lender's Percentage of the amount of each draft so paid and in return such
Lender shall automatically receive an equivalent percentage participation in the
rights of the Agent to obtain reimbursement from the Borrowers for the amount of
such draft, together with interest thereon as provided for herein. The
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obligations of the Lenders to the Agent under this subsection shall be absolute,
irrevocable and unconditional under any and all circumstances whatsoever and
shall not be subject to any set-off, counterclaim or defense to payment which
any Lender may have or have had against any one or more of the Borrowers, the
Agent, any other Lender or any other Person whatsoever; PROVIDED that the
Agent's determination that any documents presented under any Letter of Credit
comply with the terms thereof is not ultimately determined by a court of law to
have constituted the gross negligence or willful misconduct of the Agent. In the
event that any Lender fails to honor its obligation to reimburse the Agent for
its Percentage of the amount of any such draft, then in that event (i)the
defaulting Lender shall have no right to participate in any recoveries from any
one or more of the Borrowers or Guarantors in respect of such draft and (ii) all
amounts to which the defaulting Lender would otherwise be entitled under the
terms of this Agreement or any of the other Loan Documents shall first be
applied to reimbursing the Agent for the defaulting Lender's portion of the
draft, together with interest thereon as provided for herein. Upon reimbursement
to the Agent (pursuant to clause (ii) above or otherwise) of the defaulting
Lender's share of the draft together with interest thereon, the defaulting
Lender shall thereupon be entitled to its pro rata participation in the Agent's
right of recovery against any one or more of the Borrowers or Guarantors in
respect of the draft paid by the Agent.
SECTION 1.5. MANNER AND DISBURSEMENT OF LOANS.
(a) REVOLVING CREDIT AND TERM LOANS. Any Borrower shall give written or
telephonic notice to the Agent (which notice shall be irrevocable once given
and, if given by telephone, shall be promptly confirmed in writing) by no later
than 11:00 a.m. (Chicago time) on the date such Borrower requests that any
Borrowing of Loans be made to it under the Revolving Credit Commitments or Term
Credit Commitments, and the Agent shall promptly notify each Lender of the
Agent's receipt of each such notice. Each such notice shall specify the date of
the Borrowing of Loans requested (which must be a Business Day), the Borrower
making such Borrowing, the type of Loan being requested, and the amount of such
Borrowing. Each such Borrowing of Loans shall initially constitute part of the
Domestic Rate Portion except to the extent such Borrower has otherwise timely
elected that such Borrowing, or any part thereof, constitute part of a LIBOR
Portion as provided in Section 2 hereof. Not later than 1:00 p.m. (Chicago time)
on the date specified for any Borrowing of Loans to be made hereunder, each
Lender shall make the proceeds of its Loan comprising part of such Borrowing
available to the Agent in Chicago, Illinois in immediately available funds.
Subject to the provisions of Section 6 hereof, the proceeds of each Borrowing of
Loans shall be made available to the relevant Borrower at the principal office
of the Agent in Chicago, Illinois, in immediately available funds, upon receipt
by the Agent from each Lender of its Percentage of such Borrowing.
(b) REIMBURSEMENT OBLIGATION. In the event no Borrower gives notice
pursuant to Section 1.5(a) above of a Borrowing of Revolving Credit Loans equal
to the amount of the Borrowers' obligation to reimburse the Agent for a drawing
the Agent paid on a Letter of Credit and no Borrower has notified the Agent by
11:00 a.m. (Chicago time) on the day such reimbursement obligation becomes due
that such Borrower intends to repay such reimbursement obligation through funds
not borrowed under this Agreement, the Borrowers shall be deemed to have
requested a Borrowing of Revolving Credit Loans constituting part of the
Domestic Rate Portion on such day in the amount of such reimbursement obligation
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then due, subject to Section 6.1 hereof, which Borrowing shall be applied to pay
the reimbursement obligation then due.
(c) AGENT RELIANCE ON BANK FUNDING. Unless the Agent shall have been
notified by a Lender prior to 1:00 p.m. (Chicago time) on the date a Borrowing
is to be made hereunder that such Lender does not intend to make the proceeds of
its Loan available to the Agent, the Agent may assume that such Lender has made
such proceeds available to the Agent on such date and the Agent may in reliance
upon such assumption make available to the relevant Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the Agent
by such Lender and the Agent has made such amount available to such Borrower,
the Agent shall be entitled to receive such amount from such Lender forthwith
upon the Agent's demand, together with interest thereon in respect of each day
during the period commencing on the date such amount was made available to such
Borrower and ending on but excluding the date the Agent recovers such amount at
a rate per annum equal to the effective rate charged to the Agent for overnight
federal funds transactions with member banks of the federal reserve system for
each day as determined by the Agent (or in the case of a day which is not a
Business Day, then for the preceding day). If such amount is not received from
such Lender by the Agent immediately upon demand, (i) the Borrowers will, on
demand, repay to the Agent the proceeds of such Loan attributable to such Lender
with interest thereon at a rate per annum equal to the interest rate applicable
to the relevant Loan, but without such payment being considered a payment or
prepayment of a LIBOR Portion, so that the Borrowers will have no liability
under Section 2.9 hereof with respect to such payment, (ii) the defaulting
Lender shall have no right to participate in any recoveries from any one or more
of the Borrowers or Guarantors in respect of such Loan and (iii) all amounts to
which the defaulting Lender would otherwise be entitled under the terms of this
Agreement or any of the other Loan Documents shall first be applied to
reimbursing the Agent for the defaulting Lender's Loan, together with interest
thereon as provided for herein. Upon reimbursement to the Agent (pursuant to
clauses (i) or (iii) above or otherwise) of the amount advanced by the Agent in
respect of the defaulting Lender's Loan together with interest thereon, the
defaulting Lender shall thereupon be entitled to participate in recoveries from
any one or more of the Borrowers or Guarantors in respect of such Loan.
(d) MANNER OF OBTAINING LETTERS OF CREDIT. Each time a Borrower
requests the issuance for such Borrower's account of a Letter of Credit, any
Borrower shall provide the Agent at least (2) Business Days advance written
notice thereof no later than 10:00 a.m. (Chicago time), such notice in each case
to be accompanied by an Application for such Letter of Credit properly completed
and executed by such Borrower and in the case of an extension or an increase in
the amount of a Letter of Credit, a written request therefor, in a form
acceptable to the Agent, in each case, together with the fees called for by this
Agreement. The Agent shall notify each Lender of each Letter of Credit issued or
increased and the amount of such issuance or increase since the last such
notice.
SECTION 1.6. THE SWING LINE. (a) SWING LOANS. Subject to all of the
terms and conditions hereof, Xxxxxx Trust and Savings Bank ("XXXXXX") agrees to
make loans to the Borrowers under the Swing Line ("SWING Loans") which shall not
in the aggregate at any time outstanding exceed the lesser of (i) the Swing Line
Commitment then in effect or (ii) the difference between the Revolving Credit
Commitments then in effect and the sum of Revolving Credit Loans and L/C
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Obligations outstanding at the time of computation. The Swing Line Commitment
shall be available to the Borrowers and may be availed of by the Borrowers from
time to time and borrowings thereunder may be repaid and used again during the
period ending on the Revolving Credit Termination Date; PROVIDED that each Swing
Loan must be repaid on the last day of the Interest Period applicable thereto.
All Swing Loans shall be evidenced by a Swing Line Note of the Borrowers,
jointly and severally, issued to Xxxxxx in the form of Exhibit A-3 hereto (the
"SWING LINE NOTE"). Without regard to the face principal amount of the Swing
Line Note, the actual principal amount at any time outstanding and owing by the
Borrowers on account of the Swing Line Note during the period ending on the
Revolving Credit Termination Date shall be the sum of all Swing Loans then or
theretofore made thereon less all payments actually received thereon.
(b) PAYMENT. Each Swing Loan shall be due and payable on the last day
of the Interest Period selected therefor. The Borrowers may voluntarily prepay
any Swing Loan before its maturity at any time upon notice to Xxxxxx prior to
1:00 p.m. (Chicago time) on the date fixed for prepayment, each such prepayment
to be made by the payment of the principal amount to be prepaid accrued interest
thereon to the date of prepayment and any amount due Xxxxxx under Section 2.9
hereof.
(c) MINIMUM BORROWING AMOUNT. Each Swing Loan which bears interest with
reference to the Domestic Rate shall be in an amount not less than $100,000.
Each Fixed Rate Swing Loan shall be in an amount not less than $500,000.
(d) INTEREST ON SWING LOANS. Each Swing Loan shall bear interest at (x)
the sum of the Domestic Rate from time to time in effect plus the Applicable
Margin or (y) if the Borrower so elects in accordance with the following
provisions, Xxxxxx' Quoted Rate; PROVIDED, HOWEVER, that upon the occurrence and
during the continuance of any Payment Default, such Swing Loan shall bear
interest, whether before or after judgment, until payment in full thereof
through the end of the Interest Period then applicable thereto at a rate per
annum equal to the sum of two percent (2%) plus the interest rate which would
otherwise be applicable thereto and, thereafter, at a rate per annum equal to
the sum of two percent (2%) plus the Applicable Margin plus the Domestic Rate
from time to time in effect. Interest on each Swing Loan shall be due and
payable on the last day of each Interest Period applicable thereto, and interest
after maturity (whether by lapse of time, acceleration or otherwise) shall be
due and payable upon demand.
(e) REQUESTS FOR SWING LOANS. The relevant Borrower shall give Xxxxxx
prior notice (which may be written or oral) no later than 12:00 Noon (Chicago
time) on the date upon which such Borrower requests that any Swing Loan be made,
of the amount and date of such Swing Loan and the Interest Period selected
therefor. Within thirty (30) minutes after receiving such notice, Xxxxxx shall
in its discretion quote an interest rate to such Borrower at which Xxxxxx would
be willing to make such Swing Loan available to such Borrower for a given
Interest Period (the rate so quoted for a given Interest Period being herein
referred to as "XXXXXX' QUOTED RATE"). The Borrowers acknowledge and agree that
the interest rate quote is given for immediate and irrevocable acceptance, and
if a Borrower does not so immediately accept Xxxxxx' Quoted Rate for the full
amount requested by such Borrower for such Swing Loan, the Xxxxxx' Quoted Rate
shall be deemed immediately withdrawn and such Swing Loan shall bear interest at
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the sum of the Applicable Margin plus the Domestic Rate from time to time in
effect. Subject to all of the terms and conditions hereof, the proceeds of such
Swing Loan shall be made available to such Borrower on the date so requested at
the offices of the Agent in Chicago, Illinois. Anything contained in the
foregoing to the contrary notwithstanding, (i) the obligation of Xxxxxx to make
Swing Loans shall be subject to all of the terms and conditions of this
Agreement and (ii) Xxxxxx shall not be obligated to make more than one Swing
Loan during any one day. The Agent shall notify each Lender of each Swing Loan
and the amount of each such Swing Loan made since the last notice.
(f) REFUNDING LOANS. In its sole and absolute discretion, Xxxxxx may at
any time, on behalf of the Borrowers (which hereby irrevocably authorize Xxxxxx
to act on their behalf for such purpose) and with notice to any Borrower,
request each Lender to make a Revolving Credit Loan constituting the Domestic
Rate Portion of the Revolving Credit Notes in an amount equal to such Lender's
Percentage of the amount of the Swing Loans outstanding on the date such notice
is given. Unless any of the conditions of Section 6.1 are not fulfilled on such
date, each Lender shall make the proceeds of its requested Revolving Credit Loan
available to Xxxxxx, in immediately available funds, at Xxxxxx' principal office
in Chicago, Illinois, before 12:00 Noon (Chicago time) on the Business Day
following the day such notice is given. The proceeds of such Borrowing of
Revolving Credit Loans shall be immediately applied to repay the outstanding
Swing Loans; PROVIDED, HOWEVER, that unless any Default or Event of Default has
occurred and is continuing or any Borrower otherwise permits, the proceeds of
such Borrowing of Revolving Credit Loans shall not be requested if the same
would repay any outstanding Fixed Rate Swing Loan prior to the end of the
Interest Period applicable thereto.
(g) PARTICIPATIONS. If any Lender refuses or otherwise fails to make
its Revolving Credit Loan when requested by Xxxxxx pursuant to Section 1.6(f)
above (because the conditions in Section 6.1 are not satisfied or otherwise),
such Lender will, by the time and in the manner such Revolving Credit Loan was
to have been funded to Xxxxxx, purchase from Xxxxxx an undivided participating
interest in the outstanding Swing Loans in an amount equal to its Percentage of
the aggregate principal amount of Swing Loans that were to have been repaid with
such Revolving Credit Loans; PROVIDED, HOWEVER, that unless and until any
Default or Event of Default has occurred and is continuing, no purchase of a
participation in a Fixed Rate Swing Loan need be made until after expiration of
the Interest Period applicable thereto. Each Lender that so purchases a
participation in a Swing Loan shall thereafter be entitled to receive its
Percentage of each payment of principal received on the Swing Loans and of
interest received thereon accruing from the date such Lender funded to Xxxxxx
its participation in such Swing Loans. The several obligations of the Lenders
under this Section 1.6(g) shall be absolute, irrevocable and unconditional under
any and all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Lender may have or have had against
any one or more of the Borrowers, any other Lender or any other Person
whatsoever. Without limiting the generality of the foregoing, such obligations
shall not be affected by any Default or Event of Default or by any reduction or
termination of the Commitments of any Lender. In the event that any Lender fails
to honor its obligation to pay the Agent for such participation in such Swing
Loans, then in that event (i) the defaulting Lender shall have no right to
participate in any recoveries from any one or more of the Borrowers or
Guarantors in respect of such Swing Loans and (ii) all amounts to which the
8
defaulting Lender would otherwise be entitled under the terms of this Agreement
or any of the other Loan Documents shall first be applied to reimbursing the
Agent for the defaulting Lender's portion of the Swing Loans, together with
interest thereon as provided for herein. Upon reimbursement to the Agent
(pursuant to clause (ii) above or otherwise) of the defaulting Lender's share of
the Swing Loans together with interest thereon, the defaulting Lender shall
thereupon be entitled to its pro rata participation in the Agent's right of
recovery against any one or more of the Borrowers or Guarantors in respect of
the Swing Loans.
SECTION 1.7. APPOINTMENT OF BORROWERS AS AGENTS FOR EACH BORROWER. Each
Borrower hereby irrevocably appoints each of the other Borrowers as its agent
hereunder to make requests on such Borrower's behalf under Section 1 hereof for
Loans to be made to such Borrower or for Letter of Credit to be issued for such
Borrower, to select on such Borrower's behalf the interest rate to be applicable
under Section 2 hereof to Portions of Loans made to such Borrower and to take
any other action contemplated by the Loan Documents with respect to credit
extended hereunder to such Borrower. The Agent shall be entitled to conclusively
presume that any such action by a Borrower under the Loan Documents is taken on
behalf of any one or more of the Borrowers whether or not the relevant Borrower
so indicates. Nothing in this Section shall preclude a Borrower from acting on
its own behalf.
(b) Each Borrower agrees that the Agent may rely upon any written or
telephonic notice given by any person the Agent in good faith believes is an
Authorized Representative without the necessity of independent investigation
and, in the event any telephonic notice conflicts with the written confirmation,
such telephonic notice shall govern if the Agent and the Lenders have acted in
reliance thereon.
SECTION 1.8. GUARANTY AGREEMENTS. Payment of the Obligations shall be
guaranteed by each Hub Partnership in which one or more of the Borrowers own
100% of the equity interest and by each Wholly-Owned Subsidiary, in each case
pursuant to a Guaranty Agreement. Notwithstanding the foregoing, Hub Highway
Services need not be a Guarantor if and so long as it owns no assets or other
Property other than a non-transferable license from the Department of
Transportation.
SECTION 2. INTEREST AND CHANGE IN CIRCUMSTANCES.
SECTION 2.1. INTEREST RATE OPTIONS.
(a) PORTIONS. Subject to the terms and conditions of this Section 2,
portions of the principal indebtedness evidenced by the Revolving Credit Notes
and Term Notes (all of the indebtedness evidenced by a Class of such Notes
bearing interest at the same rate for the same period of time being hereinafter
referred to as a "PORTION" of such Class of Notes) may, at the option of any of
the Borrowers, bear interest with reference to the Domestic Rate ("DOMESTIC RATE
PORTION") or with reference to the Adjusted LIBOR ("LIBOR PORTIONS") and
Portions may be converted from time to time from one basis to another. All of
the indebtedness evidenced by each Class of Notes which is not part of a LIBOR
Portion shall constitute a single Domestic Rate Portion. All of the indebtedness
evidenced by each Class of Notes which bears interest with reference to a
particular Adjusted LIBOR for a particular Interest Period shall constitute a
9
single LIBOR Portion. There shall not be more than eight (8) LIBOR Portions
applicable to Notes (other than Swing Notes) of the same type outstanding at any
one time, and each Lender shall have a ratable interest in each Portion based on
its Percentage. Anything contained herein to the contrary notwithstanding, the
obligation of the Lenders to create, continue or effect by conversion any LIBOR
Portion shall be conditioned upon the fact that at the time no Default or Event
of Default shall have occurred and be continuing. The Borrowers hereby jointly
and severally promise to pay interest on each Portion at the rates and times
specified in this Section 2. Anything contained herein to the contrary
notwithstanding, the Swing Loans shall bear interest pursuant to Section 1.6(d)
hereof.
(b) DOMESTIC RATE PORTION. The Domestic Rate Portion shall bear
interest at the rate determined by adding the Applicable Margin to the Domestic
Rate as in effect from time to time, provided that upon the occurrence and
during the continuation of any Payment Default, such Portion shall bear interest
(which the Borrowers hereby, jointly and severally, promise to pay at all times
herein provided), whether before or after judgment, until payment in full
thereof at the rate per annum determined by adding 2% to the sum of the
Applicable Margin plus Domestic Rate as from time to time in effect. Interest on
the Domestic Rate Portion shall be payable quarterly in arrears on the last day
of each March, June, September and December in each year (commencing June 30,
1999) and at maturity of the applicable Notes, and interest after maturity
(whether by lapse of time, acceleration or otherwise) shall be due and payable
upon demand. Any change in the interest rate on the Domestic Rate Portion
resulting from a change in the Domestic Rate shall be effective on the date of
the relevant change in the Domestic Rate.
(c) LIBOR PORTIONS. Each LIBOR Portion shall bear interest for each
Interest Period selected therefor at a rate per annum determined by adding the
Applicable Margin to the Adjusted LIBOR for such Interest Period, provided that
upon the occurrence and during the continuation of any Payment Default, such
Portion shall bear interest (which the Borrowers hereby, jointly and severally,
promise to pay at all times herein provided), whether before or after judgment,
until payment in full thereof through the end of the Interest Period then
applicable thereto at the rate per annum determined by adding 2% to the interest
rate which would otherwise be applicable thereto, and effective at the end of
such Interest Period such LIBOR Portion shall automatically be converted into
and added to the Domestic Rate Portion and shall thereafter bear interest at the
interest rate applicable to the Domestic Rate Portion after default. Interest on
each LIBOR Portion shall be due and payable on the last day of each Interest
Period applicable thereto and, with respect to any Interest Period applicable to
a LIBOR Portion in excess of three months, on the date occurring every three
months after the date such Interest Period began and at the end of such Interest
Period, and interest after maturity (whether by lapse of time, acceleration or
otherwise) shall be due and payable upon demand. Any Borrower shall notify the
Agent on or before 11:00 a.m. (Chicago time) on the third Business Day preceding
the end of an Interest Period applicable to a LIBOR Portion whether such LIBOR
Portion is to continue as a LIBOR Portion, in which event such Borrower shall
notify the Agent of the new Interest Period selected therefor, and in the event
such Borrower shall fail to so notify the Agent, such LIBOR Portion shall
automatically be converted into and added to the applicable Domestic Rate
Portion as of and on the last day of such Interest Period. The Agent shall
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promptly notify each Lender of each notice received from such Borrower pursuant
to the foregoing provision.
SECTION 2.2. MINIMUM LIBOR PORTION AMOUNTS. Each LIBOR Portion shall be
in an amount equal to $1,000,000 or such greater amount which is an integral
multiple of $100,000.
SECTION 2.3. COMPUTATION OF INTEREST. All interest on each LIBOR
Portion shall be computed on the basis of a year of 360 days for the actual
number of days elapsed. All interest on the Domestic Rate Portion shall be
computed on the basis of a year of 365 days (or, in a leap year, 366 days) for
the actual number of days elapsed.
SECTION 2.4. MANNER OF RATE SELECTION. Any Borrower shall notify the
Agent by 11:00 a.m. (Chicago time) at least 3 Business Days prior to the date
upon which such Borrower requests that any LIBOR Portion be created or that any
part of the Domestic Rate Portion be converted into a LIBOR Portion (each notice
to specify in each instance the amount thereof and the Interest Period selected
therefor), and the Agent shall promptly notify each Lender of each notice
received from such Borrower pursuant to the foregoing provision. If any request
is made to convert a LIBOR Portion into the other type of Portion available
hereunder, such conversion shall only be made so as to become effective as of
the last day of the Interest Period applicable thereto. All requests for the
creation, continuance and conversion of Portions under this Agreement shall be
irrevocable. Such requests may be written or oral and the Agent is hereby
authorized to honor telephonic requests for creations, continuances and
conversions received by it from any person the Agent in good faith believes to
be an Authorized Representative without the necessity of independent
investigation, the Borrowers hereby jointly and severally indemnifying the Agent
and the Lenders from any liability or loss ensuing from so acting.
SECTION 2.5. CHANGE OF LAW. Notwithstanding any other provisions of
this Agreement or any Note, if at any time any Lender shall determine in good
faith that any change in applicable laws, treaties or regulations or in the
interpretation thereof makes it unlawful for such Lender to create or continue
to maintain any LIBOR Portion, it shall promptly so notify the Agent (which
shall in turn promptly notify any Borrower and the other Lenders) and the
obligation of such Lender to create, continue or maintain any such LIBOR Portion
under this Agreement shall terminate if and so long as such Lender is legally
required not to create, continue or maintain such LIBOR Portion. The Borrowers,
on demand, shall, if a Lender is legally required to discontinue its maintenance
of any such LIBOR Portion, thereupon prepay the outstanding principal amount of
the affected LIBOR Portion, together with all interest accrued thereon and all
other amounts payable to the affected Lender with respect thereto under this
Agreement; PROVIDED, HOWEVER, that the relevant Borrower may elect to convert
the principal amount of the affected Portion into the other type of Portion
available hereunder, subject to the terms and conditions of this Agreement.
SECTION 2.6. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN
ADJUSTED LIBOR. Notwithstanding any other provision of this Agreement or any
Note, if prior to the commencement of any Interest Period, the Required Lenders
shall determine in good faith that deposits in the amount of any LIBOR Portion
scheduled to be outstanding during such Interest Period are not readily
available to such Lenders in the relevant market or, by reason of circumstances
11
affecting the relevant market, adequate and reasonable means do not exist for
ascertaining Adjusted LIBOR, then such Lenders shall promptly give notice
thereof to the Agent (which shall in turn promptly notify any Borrower and the
other Lenders) and the obligations of the Lenders to create, continue or effect
by conversion any such LIBOR Portion in such amount and for such Interest Period
shall terminate until deposits in such amount and for the Interest Period
selected by the relevant Borrower shall again be readily available in the
relevant market and adequate and reasonable means exist for ascertaining
Adjusted LIBOR.
SECTION 2.7. TAXES AND INCREASED COSTS. With respect to any LIBOR
Portion or Fixed Rate Swing Loan, if any Lender shall determine in good faith
that any change in any applicable law, treaty, regulation or guideline
(including, without limitation, Regulation D of the Board of Governors of the
Federal Reserve System) or any new law, treaty, regulation or guideline, or any
interpretation of any of the foregoing by any governmental authority charged
with the administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over such Lender or its lending branch or
the LIBOR Portions or Fixed Rate Swing Loans contemplated by this Agreement
(whether or not having the force of law), shall:
(i) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in
or for the account of, or loans by, or any other acquisition of funds
or disbursements by, such Lender which is not in any instance already
accounted for in computing the interest rate applicable to such LIBOR
Portion or Fixed Rate Swing Loan;
(ii) subject such Lender, any LIBOR Portion or Fixed Rate
Swing Loan or any Note to the extent it evidences such a Portion or
Loan to any tax (including, without limitation, any United States
interest equalization tax or similar tax however named applicable to
the acquisition or holding of debt obligations and any interest or
penalties with respect thereto), duty, charge, stamp tax, fee,
deduction or withholding in respect of this Agreement, any LIBOR
Portion or Fixed Rate Swing Loan or any Note to the extent it evidences
such a Portion or Loan, except such taxes as may be measured by the
overall net income or gross receipts of such Lender or its lending
branches and imposed by any jurisdiction, or any political subdivision
or taxing authority thereof, in which such Lender transacts business;
(iii) change the basis of taxation of payments of principal and
interest due from any Borrower to such Lender hereunder or under any
Note to the extent it evidences any LIBOR Portion or Fixed Rate Swing
Loan (other than by a change in taxation of the overall net income or
gross receipts of such Lender or its lending branches); or
(iv) impose on such Lender any penalty with respect to the
foregoing or any other condition regarding this Agreement, any LIBOR
Portion or Fixed Rate Swing Loan, or its disbursement, or any Note to
the extent it evidences any LIBOR Portion or Fixed Rate Swing Loan;
and such Lender shall determine in good faith that the result of any of the
foregoing is to increase the actual cost (whether by incurring a cost or adding
12
to a cost) to such Lender of creating or maintaining any LIBOR Portion or Fixed
Rate Swing Loan hereunder or to reduce the amount of principal or interest
received or receivable by such Lender (without benefit of, or credit for, any
prorations, exemption, credits or other offsets available under any such laws,
treaties, regulations, guidelines or interpretations thereof), then the
Borrowers shall pay within 15 days of demand to the Agent for the account of
such Lender from time to time as specified by such Lender such additional
amounts as such Lender shall reasonably determine are sufficient to compensate
and indemnify it for such increased cost or reduced amount. If a Lender makes
such a claim for compensation, it shall provide to any Borrower (with a copy to
the Agent) a certificate setting forth the computation of the increased cost or
reduced amount as a result of any event mentioned herein in reasonable detail
and such certificate shall constitute prima facie evidence of such cost or
amount, if reasonably determined.
SECTION 2.8. CHANGE IN CAPITAL ADEQUACY REQUIREMENTS. If any Lender
shall determine that the adoption after the date hereof of any generally
applicable law, rule or regulation regarding capital adequacy, or any change in
any existing law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender (or any of its branches) with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital caused directly by such Lender's
obligations hereunder or for the credit which is the subject matter hereof to a
level below that which such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's policies with
respect to liquidity and capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within fifteen (15) days after demand by
such Lender, the Borrowers shall pay to the Agent for the account of such Lender
such additional amount or amounts reasonably determined by such Lender as will
compensate such Lender for such reduction. If a Lender makes such a claim for
compensation, it shall provide to any Borrower (with a copy to the Agent) a
certificate setting forth the computation of the amount demanded in reasonable
detail and the amount reflected in such certificate, shall, if reasonably
determined, constitute prima facie evidence.
SECTION 2.9. FUNDING INDEMNITY. In the event any Lender shall incur any
loss, cost or expense (including, without limitation, any loss (including loss
of profit), cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired or contracted to be acquired
by such Lender to fund or maintain its part of any LIBOR Portion or Fixed Rate
Swing Loan or the relending or reinvesting of such deposits or other funds or
amounts paid or prepaid to such Lender) as a result of:
(i) any payment of a LIBOR Portion or Fixed Rate Swing Loan
on a date other than the last day of the then applicable Interest
Period for any reason, whether before or after default, and whether or
not such payment is required by any provisions of this Agreement; or
13
(ii) any failure by any Borrower to create, borrow, continue
or effect by conversiono, or prepay, a LIBOR Portion or borrow any
Fixed Rate Swing Loan, in each case on the date specified in a notice
given pursuant to this Agreement;
then, upon the demand of such Lender, the Borrowers shall pay to the Agent for
the account of such Lender such amount as will reimburse such Lender for such
loss, cost or expense. If a Lender requests such a reimbursement, it shall
provide to any Borrower (with a copy to the Agent) a certificate setting forth
the computation of the loss, cost or expense giving rise to the request for
reimbursement in reasonable detail and such certificate shall constitute prima
facie evidence of such loss, cost or expense, if reasonably determined.
SECTION 2.10. LENDING BRANCH. Each Lender may, at its option, elect to
make, fund or maintain its pro rata share of the Loans hereunder at the branches
or offices specified on the signature pages hereof or on any Assignment
Agreement executed and delivered pursuant to Section 11.10 hereof or at such of
its branches or offices as such Lender may from time to time elect; PROVIDED,
that if a Lender at its option (not when required by this Agreement) designates
an alternative lending office or branch as described above, to the extent such
designation would at the time of such redesignation require the Borrowers to pay
any amounts pursuant to Section 1.4(e), 2.7, 2.8 or 11.1 hereof in excess of
that for which the Borrowers would have already been liable had such alternative
office or branch not been used, the Borrowers shall not be liable for such
increased amounts. To the extent reasonably possible, a Lender will use
reasonable commercial efforts available to it to mitigate or avoid any
obligation by the Borrowers to pay any amount pursuant to Section 1.4(e), 2.7 or
2.8 hereof or the occurrence of any circumstances of the nature described in
Section 2.6 hereof, including without limitation the designation of an alternate
branch or funding office with respect to its pro rata share of the LIBOR
Portions to reduce any liability of the Borrowers to such Lender under Section
2.7 or Section 2.8 hereof or to avoid the unavailability of an interest rate
option under Section 2.6 hereof, so long as such efforts are neither impractical
nor otherwise disadvantageous to the Lender.
SECTION 2.11. DISCRETION OF LENDERS AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Notes in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder (including, without
limitation, determinations under Sections 2.6, 2.7 and 2.9 hereof) shall be made
as if each Lender had actually funded and maintained each LIBOR Portion during
each Interest Period applicable thereto through the purchase of deposits in the
relevant market in the amount of its pro rata share of such LIBOR Portion,
having a maturity corresponding to such Interest Period, and bearing an interest
rate equal to the LIBOR for such Interest Period.
SECTION 2.12. REPLACEMENT OF AFFECTED LENDERS. At any time any Lender is
an Affected Lender, the Borrowers may replace such Lender as a party to this
Agreement with one or more other bank(s) or financial institution(s) acceptable
to the Agent (which acceptance shall not be unreasonably withheld), such bank(s)
or financial institution(s) to have Commitments which total the Affected
Lender's Commitment and are otherwise in such amounts as shall satisfy Section
11.10 hereof (and upon notice from the Borrowers such Affected Lender shall
14
assign pursuant to an Assignment Agreement, and without recourse or warranty,
its Commitments, its Loans, its Notes, and all of its other rights and
obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon and such Affected
Lender's ratable share of all accrued and unpaid commitment and letter of credit
fees and all other Obligations owed to the Affected Lender, but in any event
without any payment of any amounts otherwise payable under Section 2.9 hereof as
a result of such Lender receiving payment of any LIBOR Portion prior to the end
of an Interest Period therefor). Any such assumption and purchase shall be made
in accordance with the provisions of Section 11.10 hereof relating to
assignments of Loans and Commitments.
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS, AND APPLICATIONS.
SECTION 3.1. FEES.
(a) COMMITMENT FEE. For the period from and including the date hereof
to but not including the Revolving Credit Termination Date, the Borrowers shall
pay to the Agent for the ratable benefit of the Lenders in accordance with their
Percentages, a commitment fee at the Applicable Margin (computed on the basis of
a year of 360 days for the actual number of days elapsed) on the average daily
unused portion of the Revolving Credit Commitments. Such commitment fee shall be
payable quarterly in arrears on the last day of each March, June, September and
December in each year (commencing June 30, 1999) and on the Revolving Credit
Termination Date.
(b) LETTER OF CREDIT FEES. On the date of issuance or extension,
increase in the amount, of each Letter of Credit, the Borrowers shall pay to the
Agent for its own account an issuance fee equal to .125% of the face amount (or
the increase in the face amount of) such Letter of Credit. Quarterly in arrears,
on the last day of each March, June, September and December in each year
(commencing June 30, 1999), the Borrowers shall pay to the Agent for the ratable
benefit of the Lenders, a letter of credit fee at the Applicable Margin for a
LIBOR Portion (computed on the basis of a year of 360 days for the actual number
of days elapsed) on the average daily face amount of Letters of Credit
outstanding during the immediately preceding three (3) months. In addition to
the letter of credit fee called for above, the Borrowers further agree to pay to
the Agent for its own account such processing and transaction fees and charges
as the Agent from time to time customarily imposes in connection with any
amendment, cancellation, negotiation and/or payment of letters of credit and
drafts drawn thereunder.
SECTION 3.2. VOLUNTARY PREPAYMENTS. Each Borrower shall have the
privilege of prepaying the Revolving Credit Notes, Term Notes or Swing Line Note
in whole or in part (provided if such prepayment of any Class of Notes is in
part, then such prepayment of such class of Notes shall aggregate not less than
$500,000 in the case of the Revolving Credit Notes or Term Notes and not less
than $50,000 in the case of the Swing Line Note) at any Business Day upon
written notice to the Agent not later than 11:00 a.m. (Chicago time) on such
day, the Agent to promptly so notify the Lenders, by paying to the Agent for the
account of the Lenders the principal amount to be prepaid and (i) if such a
prepayment prepays any Class of Notes in full accrued interest thereon to the
date of prepayment, (ii) in the case of the Revolving Credit Notes, if such
15
prepayment is accompanied by the termination in whole of the Revolving Credit
Commitments, accrued commitment fees to the date of prepayment and (iii) any
amounts due to the Lenders under Section 2.9 hereof. Voluntary prepayments of
the principal amount of the Term Loans shall be applied to the several
installment maturities on the Term Notes in the inverse order of their
respective maturities.
SECTION 3.3. MANDATORY PREPAYMENTS.
(a) COMMITMENT REDUCTIONS. The Borrowers covenant and agree that if at
any time the sum of the then unpaid principal balance of the Revolving Credit
Notes, the Swing Line Note and the L/C Obligations shall be in excess of the
Revolving Credit Commitments, the Borrowers shall immediately and without notice
or demand pay over the amount of the excess to the Agent for the account of the
Lenders as and for a mandatory prepayment on such Obligations, with each such
prepayment first to be applied to the Revolving Credit Notes and Swing Line
Notes until payment in full thereof with any remaining balance to be held by the
Agent as collateral security for the L/C Obligations.
(b) EXCESS CASH FLOW. No later than forty-five (45) days after the
close of each fiscal year of the Public Hub Company, the Borrowers shall pay
over to the Agent for the ratable benefit of the Lenders, as and for a mandatory
prepayment on the Term Notes, an amount equal to 50% of Excess Cash Flow for the
then most recently completed fiscal year. Notwithstanding anything contained
herein to the contrary, if the Cash Flow Leverage Ratio is less than 2.5 to 1.00
for any two consecutive fiscal quarters of the Public Hub Company, no further
prepayment shall at any time thereafter be required under this Section 3.3(b).
(c) EQUITY OFFERING. Within five (5) Business Days of receipt by or
for any Borrower of proceeds in excess of $1,000,000 from any public offering or
private placement of any capital stock or other equity securities of any
Borrower (other than proceeds from (A) any sale of capital stock of a Borrower
pursuant to an employee stock ownership plan or (B) any sale of capital stock of
a Borrower, or any options to acquire any such stock, to officers, directors or
key employees of such Borrower or any of its Subsidiaries as reasonable
compensation for services rendered or (C) any exercise by such officers or
directors of such options or (D) any issuance of capital stock or other equity
interests to any Borrower or any Wholly-Owned Subsidiary), such Borrower shall
make a mandatory prepayment on the Term Loans in an amount equal to 50% of the
Net Cash Proceeds of such issuance.
(d) ASSET SALES. If any Borrower or Subsidiary shall at any time or
from time to time make or agree to make a Disposition or shall suffer an Event
of Loss resulting in Net Cash Proceeds in excess of $1,000,000 on a cumulative
basis during any calendar year, then (x) any Borrower shall promptly notify the
Agent of such proposed Disposition or Event of Loss (including the amount of the
estimated Net Cash Proceeds to be received by any Borrower or Subsidiary in
respect thereof) and (y) no later than one (1) calendar year after receipt by
any Borrower or Subsidiary of the Net Cash Proceeds of such Disposition or Event
of Loss (or, if earlier, the determination by such Borrower or Subsidiary, as
the case may be, not to replace or rebuild, the Property disposed of, lost or
condemned, as the case may be, or to purchase with such Net Cash Proceeds other
Property beneficial to the conduct of the Borrowers' businesses in the ordinary
16
course), the Borrowers will prepay the Term Notes in an amount equal to 100% of
such Net Cash Proceeds (less any amounts theretofore applied to such repair,
replacement or acquisition) and will deliver to the Agent, concurrently with
such prepayment, a certificate signed by the President or Chief Financial
Officer of the Public Hub Company setting forth the calculation of such Net Cash
Proceeds.
(e) APPLICATION. Each such prepayment required on the Term Notes by
this Section 3.3 shall be applied to the several installment maturities due on
the Term Notes in the inverse order of their respective maturities.
SECTION 3.4. REDUCTION AND TERMINATION OF COMMITMENTS. (a) VOLUNTARY.
The Borrowers shall have the privilege from time to time upon not less than five
(5) Business Day's prior notice to the Agent (which shall promptly notify the
Lenders) to ratably reduce the Revolving Credit Commitments in whole or in part
(but in part then in a minimum amount of $1,000,000 or such greater amount which
is an integral multiple of $100,000), provided that the Revolving Credit
Commitments may not be reduced to the extent that after giving effect to such
reduction, the aggregate principal amount of the Revolving Credit Loans, Swing
Loans and L/C Obligations then outstanding would exceed the Revolving Credit
Commitments. Any reduction of the Revolving Credit Commitments to a level below
the L/C Commitment shall effect a concurrent reduction in the L/C Commitments so
as to equal the total Revolving Credit Commitments after giving effect to such
reduction. Each reduction of the Revolving Credit Commitments shall concurrently
reduce the Swing Line Commitment by the same percentage as such reduction in the
Revolving Credit Commitments. Any termination of the Revolving Credit
Commitments pursuant to this Section may not be reinstated.
(b) GENERALLY. All reductions in the Commitments (whether voluntary or
mandatory) shall decrease the Commitments of the Lenders pro rata in accordance
with their Percentages.
SECTION 3.5. PLACE AND APPLICATION OF PAYMENTS. All payments of
principal, interest, fees and other amounts shall be made to the Agent at its
office located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx (or at such other
place as the Agent may specify) in immediately available and freely transferable
funds at the place of payment. All such payments shall be made without setoff or
counterclaim and without reduction for, and free from, any and all present or
future taxes (except for income or franchise taxes as set forth in Section
11.1(a) hereof), levies, imposts, duties, fees, charges, deductions,
withholdings, restrictions or conditions of any nature imposed by any government
or political subdivision or taxing authority thereof. Payments received by the
Agent after 11:00 a.m. (Chicago time) (or 12:00 noon (Chicago time) in the case
of payments on the Swing Loans) shall be deemed received as of the opening of
business on the next Business Day. Except as herein provided, all payments shall
be received by the Agent for the ratable account of the Lenders, and shall be
promptly distributed by the Agent ratably to the Lenders in accordance with
their Percentages. Payments under Sections 2.7 and 2.9 hereof may be made by the
Borrowers directly to the relevant Lender and payments of principal, interest
and fees with respect to the Swing Line Notes and Swing Line Commitment shall be
retained by Xxxxxx for its own account (subject to the participations hereunder
of the Lenders in such Loans). Unless the applicable Borrower otherwise directs,
payments on any Note shall be deemed first applied to the Domestic Rate Portion
17
of such Note until payment in full thereof, with any balance applied to the
LIBOR Portions of such Note in the order in which their Interest Periods expire.
All prepayments of the Term Loans (whether voluntary or required) shall be
applied to the several installment maturities due on the Term Notes in the
inverse order of their respective maturities. No amounts paid or prepaid on the
Term Notes may be reborrowed. All payments on the Loans (whether voluntary or
required) shall be accompanied by any amount due the Lenders under Section 2.9
hereof, but no acceptance of such a payment without requiring payment of amounts
due under Section 2.9 shall preclude a later demand by the Lenders for any
amount due them under Section 2.9 in respect of such payment.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Loans and other Obligations or the
Hedging Liability by the Agent or any of the Lenders after the occurrence and
during the continuance of an Event of Default shall be remitted to the Agent and
distributed as follows:
(a) first, to the payment of any outstanding reasonable costs
and expenses incurred by the Agent in protecting, preserving or
enforcing rights under this Agreement or any of the other Loan
Documents, and in any event including all reasonable costs and expenses
of a character which the Borrowers have agreed to pay under Section
11.5 hereof (such funds to be retained by the Agent for its own account
unless it has previously been reimbursed for such costs and expenses by
the Lenders, in which event such amounts shall be remitted to the
Lenders to reimburse them for payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or
other fees or indemnification amounts due under this Agreement or any
of the other Loan Documents other than for principal of the Loans and
L/C Obligations, pro rata as among the Agent and the Lenders in accord
with the amount of such interest and other fees or Obligations owing
each;
(c) third, to the payment of the principal of the Swing
Loans;
(d) fourth, to the payment (or cash collateralization) of the
principal of the other Loans, L/C Obligations and Hedging Liability,
pro rata as among the Lenders (and in the case of Hedging Liability,
their Affiliates) in accord with the respective amounts thereof owing
(whether or not then due) to the Lenders and such Affiliates; and
(e) fifth, to the Borrowers or to whoever the Agent
reasonably determines to be lawfully entitled thereto.
In the event that the amount of any Hedging Liability or L/C Obligations are not
fixed and determined at the time any such payments or collections are received
which are to be allocated thereto, the payments or collections so allocated
shall be held by the Agent as collateral security until such Hedging Liability
or L/C Obligations, as the case may be, are fixed and determined and then the
same shall be applied to such Hedging Liability or L/C Obligations.
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SECTION 3.6. NOTATIONS. Loans made against a Note, the status of all
amounts evidenced by a Note as constituting part of the Domestic Rate Portion or
a LIBOR Portion or Fixed Rate Swing Loan, and, in the case of each LIBOR Portion
or Fixed Rate Swing Loan, the rate of interest and Interest Period applicable to
such Portion shall be recorded by the relevant Lender on its books and records
or, at its option in any instance, endorsed on a schedule to the relevant Note
and the unpaid principal balance and status, rates and Interest Periods so
recorded or endorsed by such Lender shall be prima facie evidence in any court
or other proceeding brought to enforce such Note of the principal amount
remaining unpaid thereon, the status of the Loan or Loans evidenced thereby and
the interest rates and Interest Periods applicable thereto; provided that the
failure of a Lender to record any of the foregoing shall not limit or otherwise
affect the unconditionally and absolutely joint or several obligation of the
Borrowers to repay the principal amount of each Note together with accrued
interest thereon. Prior to any Lender's negotiation of any Note, such Lender
shall record on a schedule thereto the status of all amounts evidenced thereby
as constituting part of the applicable Domestic Rate Portion or a LIBOR Portion
or Fixed Rate Swing Loan and, in the case of each LIBOR Portion or Fixed Rate
Swing Loan, the rate of interest and the Interest Period applicable thereto.
SECTION 4. DEFINITIONS; INTERPRETATION.
SECTION 4.1. DEFINITIONS. The following terms when used herein
shall have the following meanings:
"ADJUSTED LIBOR" means a rate per annum determined by the Agent in
accordance with the following formula:
LIBOR
Adjusted LIBOR = -----------------------
100%-Reserve Percentage
"RESERVE PERCENTAGE" means, for the purpose of computing Adjusted LIBOR, the
maximum rate of all reserve requirements (including, without limitation, any
marginal, emergency, supplemental or other special reserves) imposed by the
Board of Governors of the Federal Reserve System (or any successor) under
Regulation D on Eurocurrency liabilities (as such term is defined in Regulation
D) for the applicable Interest Period as of the first day of such Interest
Period, but subject to any amendments to such reserve requirement by such Board
or its successor, and taking into account any transitional adjustments thereto
becoming effective during such Interest Period. For purposes of this definition,
LIBOR Portions shall be deemed to be Eurocurrency liabilities as defined in
Regulation D without benefit of or credit for prorations, exemptions or offsets
under Regulation D. "LIBOR" means, for each Interest Period, (a) the LIBOR Index
Rate for such Interest Period, if such rate is available, and (b) if the LIBOR
Index Rate cannot be determined, the arithmetic average of the rates of interest
per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) at which
deposits in U.S. Dollars in immediately available funds are offered to the Agent
at 11:00 a.m. (London, England time) 2 Business Days before the beginning of
such Interest Period by 3 or more major banks in the interbank eurodollar market
selected by the Agent for a period equal to such Interest Period and in an
amount equal or comparable to the applicable LIBOR Portion scheduled to be
outstanding from the Agent during such Interest Period. "LIBOR INDEX RATE"
19
means, for any Interest Period, the rate per annum (rounded upwards, if
necessary, to the next higher one hundred-thousandth of a percentage point) for
deposits in U.S. Dollars for a period equal to such Interest Period which
appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time) on the
date 2 Business Days before the commencement of such Interest Period. "TELERATE
PAGE 3750" means the display designated as "Page 3750" on the Telerate Service
(or such other page as may replace Page 3750 on that service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Banker's Association
Interest Settlement Rates for U.S. Dollar deposits). Each determination of LIBOR
made by the Agent shall be conclusive and binding on the Borrowers and the
Lenders absent manifest error.
"AFFECTED LENDER" means any Lender which has given notice to a Borrower
(which has not been rescinded) of (i) any obligation by the Borrowers to pay any
amount pursuant to Section 1.4(e), 2.7, 2.8 or 11.1 hereof or (ii) the
occurrence with respect to such Lender of any circumstances of the nature
described in Section 2.6 hereof.
"AFFILIATE" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise.
"AGENT" means Xxxxxx Trust and Savings Bank and any successor thereto
appointed pursuant to Section 9.1 hereof.
"AGREEMENT" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"APPLICABLE MARGIN" with respect to the Loans and the commitment fee,
means the rate specified for such Obligation below, subject to quarterly
adjustment as hereinafter provided:
20
Applicable
Margin For Applicable Margin
Domestic Rate For LIBOR
When Following Status Portion of Portions of Applicable Margin Applicable Margin
Exists For Any Margin Revolving Credit Revolving Credit For Domestic Rate For LIBOR
Determination Date Loans and Swing Loans Is: Portion of Term Portions of Term
Loans Bearing Loan Is: Loan Is: Commitment Fee
Interest with Is:
Reference to
Domestic Rate Is:
Level I Status 0% 1.25% 0% 1.50% .25%
Level II Status .25% 1.75% .50% 2.00% .30%
Level III Status .75% 2.25% 1.00% 2.50% .40%
Level IV Status 1.00% 2.50% 1.25% 2.75% .50%
PROVIDED, HOWEVER, that all of the foregoing is subject to the following:
(i) the initial Applicable Margin in effect through the first
Determination Date (the first Determination Date to be the one
determined with reference to the quarterly accounting period of the
Public Hub Company ending December 31, 1999) shall be the Applicable
Margin for Level IV Status;
(ii) on the date the Borrowers deliver a compliance
certificate to the Agent for a given quarterly accounting period of the
Public Hub Company (commencing with the date of the Agent's receipt of
the compliance certificate required to be delivered for the quarterly
accounting period of the Public Hub Company ending December 31, 1999)
(each such delivery date being herein referred to as a "DETERMINATION
DATE"), the Borrowers shall determine to the Agent's reasonable
satisfaction whether Level I Status, Level II Status, Level III Status
or Level IV Status exists as of the close of the applicable quarterly
accounting period, based upon the compliance certificate and financial
statements delivered to the Agent under Section 7.5 hereof for such
accounting period;
(iii) any change in the Applicable Margin shall be effective
from the Determination Date for the relevant quarterly accounting
period, with such new Applicable Margin to continue in effect until the
next Determination Date in accordance with the foregoing. If the
Borrowers have not delivered a compliance certificate by the deadline
such compliance certificate is required to be delivered under Section
7.5 hereof, until a compliance certificate is delivered before the next
Determination Date, the Applicable Margin shall be the Applicable
21
Margin for Level IV Status from such deadline to such next
Determination Date. However, if the Borrowers subsequently deliver such
compliance certificate before such next Determination Date, the
Applicable Margin established by such late compliance certificate shall
take effect from the date of such delivery until such next
Determination Date in accordance with the foregoing; and
(iv) if and so long as any Default or any Event of Default by
reason of noncompliance with Section 7.5(a) or 7.5(b) hereof has
occurred and is continuing hereunder, notwithstanding anything herein
to the contrary, the Applicable Margin shall be the Applicable Margin
for Level IV Status.
"APPLICATION" is defined in Section 1.3 hereof.
"ASSIGNMENT AGREEMENTS" is defined in Section 11.10 hereof.
"AUTHORIZED REPRESENTATIVE" means those persons shown on the list of
officers provided by the Borrowers pursuant to Section 6.2(a) hereof or on any
update of any such list provided by any Borrower to the Agent, or any further or
different officer of any Borrower so named by any Authorized Representative of
any Borrower in a written notice to the Agent.
"BORROWERS" means Hub Chicago and Hub Holdings and the Public Hub
Company, collectively, and, also, each individually, with all promises and
covenants (including promises to pay) and representations and warranties of and
by the Borrowers made in the Loan Documents or any other instruments or
documents delivered pursuant thereto to be and constitute the joint and several
promises, covenants, representations and warranties of and by each and all of
such corporations.
"BORROWING" means the total of Loans of a single type made to a given
Borrower by all the Lenders (or in the case of a Swing Loan, by Xxxxxx) on a
single date, and if such Loans are to be part of a LIBOR Portion or constitute a
Fixed Rate Swing Loan, for a single Interest Period. Borrowings of Loans are
made and maintained ratably from each of the Lenders according to their
Percentages.
"BRIDGE FINANCING" means an unsecured term loan made under the Bridge
Loan Agreement by Xxxxxx to the Borrowers substantially concurrent herewith, and
extensions or renewals thereof by Xxxxxx and any other then lenders party to the
Bridge Loan Agreement, in the original principal sum of $40,000,000 maturing
(absent acceleration or prepayment) no earlier than August 1, 1999 and on terms
and conditions no more burdensome on the Borrowers in any material respect than
those contained herein.
"BRIDGE LOAN AGREEMENT" means that certain Credit Agreement dated as of
April 30, 1999 among the Borrower, Xxxxxx, individually and as Agent, and the
other lenders party thereto.
"BUSINESS DAY" means any day other than a Saturday or Sunday on which
the Agent is not authorized or required to close in Chicago, Illinois and, when
used with respect to LIBOR Portions, a day on which the Agent is also dealing in
United States Dollar deposits in London, England and Nassau, Bahamas.
22
"CAPITAL EXPENDITURES" means for any period, the aggregate of all
expenditures (whether paid in cash or accrued as a liability) by the Hub Group
during that period which, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in the
statement of cash flows of the Hub Group.
"CAPITAL LEASE" means any lease of Property which in accordance with
GAAP is required to be capitalized on the balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATION" means, as to any Person, the amount of
the liability shown on the balance sheet of such Person in respect of a Capital
Lease determined in accordance with GAAP.
"CASH FLOW LEVERAGE RATIO" means, as of any date the same is to be
determined, the ratio of (x) Total Funded Debt as of such date to (y) EBITDAM
for the four consecutive fiscal quarters of the Public Hub Company ending on
such date, or (if none so end) most recently completed prior to such date.
"CASH MATURITIES" means for any period, the aggregate amount of
payments required to be made by the Hub Group in cash during such period, with
respect to principal on all Indebtedness for Borrowed Money (whether at
maturity, as a result of mandatory sinking fund redemption, scheduled mandatory
prepayment, acceleration or otherwise); PROVIDED, HOWEVER, Cash Maturities shall
neither mean nor include (i) principal payments on the Bridge Financing, (ii)
principal payments on the Revolving Credit and (iii) voluntary prepayments..
"CHANGE OF CONTROL EVENT" means the occurrence of any one or more of
the following:
(i) (a) any Person or group of Persons (within the meaning of
Section 13 or 14 of the Exchange Act, but excluding Xxxxxxx X. Xxxxxx,
the descendants of Xxxxxxx X. Xxxxxx (whether natural or adopted), any
spouse of any of the foregoing, any estate of any of the foregoing, any
trust for the benefit of one or more of the foregoing and any Person,
all of the outstanding equity securities of which are owned by any one
or more of the foregoing (collectively, the "XXXXXX FAMILY") and Senior
Management) shall acquire beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of the Voting Stock in
the Public Hub Company having at least 35% of the ordinary voting power
over the Public Hub Company and (b) the Xxxxxx family and Senior
Management, collectively, have beneficial ownership of a lesser
percentage of the Voting Stock in the Public Hub company than such
Person or group of Persons; or
(ii) during any period of twelve (12) consecutive months
beginning after the date of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors of the
Public Hub Company (the "BOARD") and any new director (other than a
director designated by a person who has entered into an agreement with
the Public Hub Company to effect a merger, consolidation or transfer
prohibited by Section 7.14 hereof) whose election or nomination for
election was approved by a vote of at least a majority of the directors
then still in office who either were directors at the beginning of the
23
period or whose election or nomination for election was previously so
approved cease for any reason (other than death) to constitute a
majority of the Board; or
(iii) either or both of Hub Chicago or Hub Holdings shall cease
at any time and for any reason to be a Wholly-Owned Subsidiary of the
Public Hub Company; or
(iv) all of the equity interests in any Hub Partnership shall
cease at any time and for any reason, to be owned, both legally and
beneficially, by Hub Chicago, Hub Holdings and Wholly-Owned
Subsidiaries of Hub Chicago and Hub Holdings, all taken together (it
being understood and agreed that no merger, consolidation or transfer
permitted by Section 7.14, and no dissolution or liquidation permitted
by Section 7.1 hereof, shall constitute a Change of Control Event); or
(v) any "Change of Control" (or words of like import), as
defined in the indenture or other agreement governing the Senior Note
Offering (or any refinancing thereof permitted by this Agreement),
shall occur, the effect of which is to cause the acceleration of any
issue of such indebtedness or to enable any holder of such indebtedness
to cause Borrowers or Subsidiary to repurchase, redeem or retire any
such indebtedness held by such holder prior to its express maturity.
"CLASS OF NOTES" means the Revolving Credit Notes taken as a group or
the Swing Line Note taken by itself or the Term Notes taken as a group.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto.
"COMMITMENTS" means and includes the Revolving Credit Commitment,
the Swing Line Commitments and the Term Credit Commitments.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"DEFAULT" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"DISPOSITION" means the sale, lease, conveyance, or other disposition
of Property consisting of real estate, furniture, fixtures, equipment or other
fixed assets, other than sales or other dispositions expressly permitted under
Sections 7.14(a), (b), (c) or (d) hereof and any sale or other disposition
between any of the Borrowers or Guarantors.
"DIVIDEND NOTES" means the currently outstanding five-year maturity
low-interest rate notes of the Hub Partnerships aggregating approximately
$2,300,000 in principal amount as of the date hereof and evidencing the deferred
portion of the approximately $24,200,000 dividend made in 1996 by the Hub Group.
24
"DOMESTIC RATE" means, for any day, the greater of (i) the rate of
interest announced by the Agent from time to time as its prime commercial rate,
as in effect on such day (it being understood and agreed that such rate may not
be the Agent's best or lowest rate); and (ii) the sum of (x) the rate determined
by the Agent to be the average (rounded upwards, if necessary, to the next
higher 1/100 of 1%) of the rates per annum quoted to the Agent at approximately
10:00 a.m. (Chicago time) (or as soon thereafter as is practicable) on such day
(or, if such day is not a Business Day, on the immediately preceding Business
Day) by two or more Federal funds brokers selected by the Agent for the sale to
the Agent at face value of Federal funds in an amount equal or comparable to the
principal amount owed to the Agent for which such rate is being determined, PLUS
(y) 1/2 of 1%.
"DOMESTIC RATE PORTIONS" is defined in Section 2.1(a) hereof.
"EBITDAM" means, with reference to any period, Net Income for such
period plus all amounts deducted in arriving at such Net Income amount in
respect of (i) Interest Expense for such period, plus (ii) taxes (including
federal, state and local income taxes) for such period, plus (iii) all amounts
properly charged for depreciation and amortization during such period on the
books of the Hub Group, plus (iv) any deduction for Minority Interest during
such period, plus (v) all other non-cash charges during such period on the books
of the Hub Group in accordance with GAAP to the extent the aggregate amount of
such other non-cash charges do not exceed $2,500,000 during any period of four
consecutive fiscal quarters of the Public Hub Company (prorated appropriately
downward (or upward) for any shorter (or longer) period).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute thereto.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended.
"EVENT OF DEFAULT" means any event or condition identified as such in
Section 9.1 hereof.
"EVENT OF LOSS" means, with respect to any Property consisting of real
estate, furniture, fixtures, equipment or other fixed assets, any of the
following: (a) any loss, destruction or damage of such Property or (b) any
condemnation, seizure, or taking, by exercise of the power of eminent domain or
otherwise, of such Property, or confiscation of such Property or the requisition
of the use of such Property.
"EXCESS CASH FLOW" means, as of any date the same is to be computed,
EBITDAM for the period consisting of the four consecutive fiscal quarters of the
Public Hub Company ending on such date, or (if none so end) most recently
completed prior to such date, LESS Interest Expense during such period, LESS
payments in cash by the Hub Group in respect of taxes on or measured by net
income during such period, LESS the aggregate amount of all Capital Expenditures
during such period, LESS Cash Maturities during such period LESS net increases
(if any) during such period (but in any event excluding any such increase which
occurs prior to December 31, 1999) in Working Capital, LESS any payment in cash
during such period on account of Minority Interest.
25
"FIXED CHARGE COVERAGE RATIO" means, as of any date the same is to be
determined, the ratio of (x) EBITDAM during the four consecutive fiscal quarters
of the Public Hub Company ending on such date, or (if none so end) most recently
completed prior to such date, PLUS (i) Rents during such period MINUS (ii)
Capital Expenditures during such period MINUS (iii) Restricted Payments during
such period to (y) the sum of (i) all Interest Expense during the same such
period PLUS (ii) Cash Maturities during such period PLUS (iii) Rents during such
period.
"FIXED RATE SWING LOAN" means any Swing Loan bearing interest with
reference to Xxxxxx' Quoted Rate.
"FOREIGN PARTNERSHIP" means any partnership that is formed under the
laws of any jurisdiction other than the United States (or any State thereof).
"FOREIGN SUBSIDIARY" means any Subsidiary that is formed under the laws
of any jurisdiction other than the United States (or any State thereof).
"GAAP" means generally accepted accounting principles as in effect from
time to time, as applied by the Public Hub Company on a basis consistent with
the preparation of the Public Hub Company's most recent financial statements
furnished to the Lenders pursuant to Section 6.5 hereof.
"GUARANTEED LIABILITIES" is defined in Section 10.1 hereof.
"GUARANTOR" is defined in Section 10.1 hereof.
"GUARANTY AGREEMENT" means this Agreement as to Guarantors party hereto
and otherwise, either (x) a letter to the Agent in the form of Exhibit C hereto
executed by a Hub Partnership or Subsidiary in each case whereby it acknowledges
it is party hereto as a Guarantor and liable for the Obligations under Section
10 hereof or (y) such other form with similar effect as shall be satisfactory to
the Agent as to form and substance; PROVIDED, HOWEVER, that (i) Hub Partnerships
in which less than 100% of the equity interest therein is owned by one or more
of the Borrowers and (ii) Subsidiaries (other than Wholly-Owned Subsidiaries)
may limit the right of recovery on their Guaranty Agreements.
"XXXXXX" is defined in Section 1.6(a) hereof.
"XXXXXX' QUOTED RATE" is defined in Section 1.6(e) hereof.
"HEDGING ARRANGEMENTS" means interest rate swaps, interest rate caps,
interest rate collars or other recognized interest rate hedging arrangements to
hedge against interest rate risk on any or all of the Loans or the Senior Note
Offering.
"HEDGING LIABILITY" means the net liability of any one or more members
of the Hub Group to any one or more of the Lenders party to this Agreement or
their Affiliates in respect of any Hedging Arrangements as any one or more of
the members of the Hub Group may from time to time enter into with any one or
more of the Lenders party to this Agreement or their Affiliates. Unless and
26
until the amount of the Hedging Liability is fixed and determined, the Hedging
Liability shall be deemed to be the market value of the notional amount of the
hedge from the date of computation to the date the hedge expires.
"HUB CHICAGO" is defined in the introductory paragraph hereof.
"HUB DISTRIBUTION" means Hub Group Distribution Services, an Illinois
general partnership.
"HUB GROUP" means the Borrowers, Subsidiaries and Hub Partnerships,
collectively, and, also, each individually, with all promises and covenants
(including promises to pay) and representations and warranties of and by the Hub
Group made in the Loan Documents or any other instruments or documents delivered
pursuant thereto to be and constitute the joint and several promises, covenants,
representations and warranties of and by each and all of such Persons. The
phrase "ANY MEMBER OF THE HUB GROUP" and derivatives thereof appearing in the
Loan Documents shall be deemed a reference to any or all of the Persons
comprising the Hub Group (as applicable), and without limiting the generality of
the foregoing, the term "HUB GROUP" as used in the Loan Documents shall be
deemed a reference to any one or more of such Persons whether or not such phrase
or any derivative thereof is used in conjunction with such term.
"HUB HOLDINGS" is defined in the introductory paragraph hereof.
"HUB PARTNERSHIP" means each limited partnership, limited liability
partnership or limited liability company in which Hub Chicago is a general
partner (or equivalent member in the case of a limited liability company or
partnership) engaged in the business of arranging for the movement of customers'
freight by intermodal container or trailer or by truck. The parties hereto
acknowledge and agree that by virtue of the foregoing definition, Hub
Distribution is not a Hub Partnership.
"INDEBTEDNESS FOR BORROWED MONEY" means for any Person (without
duplication) (i) all indebtedness created, assumed or incurred in any manner by
such Person representing money borrowed (including by the issuance of debt
securities), (ii) all indebtedness for the deferred purchase price of property
or services (other than trade accounts payable arising in the ordinary course of
business), (iii) all indebtedness secured by any Lien upon Property of such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness, (iv) all Capitalized Lease Obligations of such Person and
(v) all obligations of such Person on or with respect to letters of credit,
bankers' acceptances and other extensions of credit whether or not representing
obligations for borrowed money.
"INTEREST EXPENSE" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense) of the Hub
Group for such period determined in accordance with GAAP.
27
"INTEREST PERIOD" means, (a) with respect to any Swing Loan, the period
commencing on the date such Swing Loan is made and ending one to five,
inclusive, days thereafter as selected by a Borrower in the notice provided
herein and (b) with respect to any LIBOR Portion, the period commencing on, as
the case may be, the creation, continuation or conversion date with respect to
such LIBOR Portion and ending 1, 2, 3 or 6 months thereafter as selected by a
Borrower in its notice as provided herein; PROVIDED that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day which
is not a Business Day, that Interest Period shall be extended to the
next succeeding Business Day, unless in the case of an Interest Period
for a LIBOR Portion the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) no Interest Period may extend beyond the final maturity
date of the relevant Note; and
(iii) the interest rate to be applicable to each LIBOR Portion
or Swing Loan for each Interest Period shall apply from and including
the first day of such Interest Period to but excluding the last day
thereof.
For purposes of determining an Interest Period, a month means a period starting
on one day in a calendar month and ending on a numerically corresponding day in
the next calendar month, PROVIDED, HOWEVER, if an Interest Period begins on the
last day of a month or if there is no numerically corresponding day in the month
in which an Interest Period is to end, then such Interest Period shall end on
the last Business Day of such month.
"L/C COMMITMENT" means $15,000,000, as the same may be reduced pursuant
to the terms hereto.
"L/C OBLIGATIONS" means the undrawn face amount of any Letter of Credit
and any outstanding obligation of the Borrowers to reimburse the Agent for
drawings under any Letter of Credit pursuant to the Applications. For such
purposes, the face amount undrawn on a Letter of Credit shall be deemed an
amount equal to the maximum amount which has not yet been drawn but could be
drawn thereunder under any circumstances and over any period of time.
"LENDER" means Xxxxxx Trust and Savings Bank, the other signatories
hereto (other than any member of the Hub Group) and all other lenders becoming
parties hereto pursuant to Section 11.10 hereof.
"LETTER OF CREDIT" is defined in Section 1.3 hereof.
"LEVEL I STATUS" means, for any Determination Date, that as of the
close of the most recently completed fiscal quarter of the Public Hub Company
with reference to which such Determination Date was set, the Cash Flow Leverage
Ratio is less than 2.00 to 1.
28
"LEVEL II STATUS" means, for any Determination Date, that as of the
close of the most recently completed fiscal quarter of the Public Hub Company
with reference to which such Determination Date was set, the Cash Flow Leverage
Ratio is greater than or equal to 2.00 to 1 but less than 3.00 to 1.
"LEVEL III STATUS" means, for any Determination Date, that as of the
close of the most recently completed fiscal quarter of the Public Hub Company
with reference to which such Determination Date was set, the Cash Flow Leverage
Ratio is greater than or equal to 3.00 to 1 but less than 3.50 to 1.
"LEVEL IV STATUS" means, for any Determination Date, that as of the
close of the most recently completed fiscal quarter of the Public Hub Company
with reference to which such Determination Date was set, the Cash Flow Leverage
Ratio is greater than or equal to 3.50 to 1.
"LIBOR PORTIONS" is defined in Section 2.1(a) hereof.
"LIEN" means any mortgage, lien, security interest, pledge, charge or
encumbrance of any kind in respect of any Property, including the interests of a
vendor or lessor under any conditional sale, Capital Lease or other title
retention arrangement.
"LOAN" means and includes Revolving Credit Loans, Term Loans and Swing
Loans and each of them singly, and the term "TYPE" of Loan refers to its status
as a Revolving Credit Loan, Term Loan or Swing Loan.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Applications, the
Guaranty Agreements and each other instrument or document to be delivered
hereunder or thereunder or otherwise in connection therewith.
"MINORITY INTEREST" means and includes (i) the percentage of each Hub
Partnership's (other than Hub Partnerships wholly-owned by the Public Hub
Company or Hub Holdings) income before taxes allocable to the limited partners
of such Hub Partnership and (ii) the percentage of Hub Distribution's income
before taxes allocable to the partners of Hub Distribution (other than the
Public Hub Company and Hub Chicago).
"NET CASH PROCEEDS" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition, (ii) sale, use, or other transactional taxes paid or payable by
such Person as a direct result of such Disposition, and (iii) amounts required
to be applied to repay principal of, premium, if any, and interest on any
Indebtedness for Borrowed Money secured by a Lien on the Property (or portion
thereof) sold or otherwise disposed of (other than the Obligations hereunder)
which is required to be and is repaid in connection with such Disposition; (b)
with respect to any Event of Loss of a Person, cash and cash equivalent proceeds
received by or for such Person's account (whether as a result of payments made
under any applicable insurance policy therefor or in connection with
condemnation proceedings or otherwise), net of (i) reasonable direct costs
incurred in connection with the collection of such proceeds, awards or other
payments, (ii) sale or other transactional taxes paid or payable by such Person
29
as a direct result of such Event of Loss, and (iii) amounts required to be
applied to repay principal of, premium, if any, and interest on any Indebtedness
for Borrowed Money secured by a Lien on the Property (or portion thereof) so
damaged or taken (other than the Obligations hereunder) which is required to be
and is repaid in connection with such Event of Loss; and (c) with respect to any
offering of equity securities of a Person or the issuance of any Indebtedness
for Borrowed Money by a Person, cash and cash equivalent proceeds received by or
for such Person's account, net of reasonable legal, underwriting, and other fees
and expenses incurred as a direct result thereof.
"NET INCOME" means, with reference to any period, the net income (or
net loss) of the Hub Group for such period as computed on a consolidated basis
in accordance with GAAP, and, without limiting the foregoing, after deduction
from gross income of all expenses and reserves, including reserves for all taxes
on or measured by income, but excluding any extraordinary profits and any
extraordinary losses and also excluding any taxes on such profits and any tax
credits on account of such losses.
"NET WORTH" means, at any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in capital and
retained earnings after deducting treasury stock, but excluding minority
interest in Subsidiaries) which would appear on the balance sheet of the Hub
Group determined on a consolidated basis in accordance with GAAP.
"OBLIGATIONS" means all obligations of the Hub Group and any of them to
pay principal and interest on the Loans, the L/C Obligations, all fees and
charges payable hereunder, and all other payment obligations of each Borrower
and Guarantor arising under or in relation to any Loan Document, in each case
whether now existing or hereafter arising, due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or acquired.
"PAYMENT DEFAULT" means any default which continues beyond any grace
period expressed in any Loan Document as applicable thereto, in the payment when
due of (x) all or any part of the principal of or interest on any Note (whether
at the stated maturity therefor at any other time provided for in this
Agreement), or (y) any obligation to reimburse the Agent for a drawing paid by
the Agent on any Letter of Credit, or (z) of any fee or other Obligation payable
hereunder or under any other Loan Document.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to any or all of its functions under ERISA.
"PERCENTAGE" means, for each Lender, the percentage of the sum of the
aggregate Revolving Credit Commitments then in effect (after giving effect to
any voluntary or mandatory reductions thereof) and aggregate Term Credit
Commitments, represented by such Lender's Revolving Credit Commitment and Term
Credit Commitment or, if the Revolving Credit Commitments have been terminated,
the percentage held by such Lender (including through participation interests in
L/C Obligations and Swing Loans) of the aggregate principal amount of all
outstanding Revolving Credit Loans, Term Loans and L/C Obligations.
30
"PERSON" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof.
"PLAN" means any employee pension benefit plan covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
that either (i) is maintained by a member of the Controlled Group for employees
of a member of the Controlled Group or (ii) is maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions.
"PORTION" is defined in Section 2.1(a) hereof.
"PROPERTY" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"PUBLIC HUB COMPANY" is defined in the introductory paragraph hereof.
"RENTS" means, as of any date of determination, the aggregate amount of
payments required to be made by the Borrowers during such period in respect of
leases or similar arrangements (including without limitation all payments
required under operating and capital leases) under which any Borrower or
Subsidiary is liable as lessee; PROVIDED, HOWEVER, that Rents shall neither mean
nor include payments made on leases of, or similar arrangements for use of,
transportable containers included by the Hub Group in its cost of goods sold in
accordance with GAAP.
"REQUIRED LENDERS" means, as of the date of determinations thereof,
any three (3) or more Lenders holding at least 55% of the Commitments or, in the
event that no Commitments are outstanding hereunder, holding at least 55% in
aggregate principal amount of the Revolving Credit Loans, Term Loans, Swing
Loans and L/C Obligations outstanding hereunder.
"RESTRICTED PAYMENTS" means (without duplication) (i) Restricted
Payments by the Public Hub Company (as defined in Section 7.16 hereof) and (ii)
any payment or other distribution by the Hub Group directly or indirectly to
purchase, redeem or otherwise acquire or retire, or otherwise made on account
of, the interest of any partner or member (other than any Borrower) in any Hub
Partnership.
"REVOLVING CREDIT" is defined in the introductory paragraph hereto.
"REVOLVING CREDIT COMMITMENTS" means the commitments of the Lenders to
make loans under the Revolving Credit in the amounts set forth opposite their
signatures hereto under the heading "REVOLVING CREDIT COMMITMENT" and opposite
their signatures on Assignment Agreements delivered pursuant to Section 11.10
hereof under the heading "REVOLVING CREDIT COMMITMENT", as such amounts may be
reduced pursuant hereto.
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"REVOLVING CREDIT LOAN" is defined in Section 1.2 hereof.
"REVOLVING CREDIT NOTE" is defined in Section 1.2 hereof.
"REVOLVING CREDIT TERMINATION DATE" means April 30, 2004, or such
earlier date on which the Revolving Credit Commitment is terminated in whole
pursuant to Sections 3.4, 8.2 or 8.3 hereof.
"SEC" means the federal Securities and Exchange Commission, and any
successor thereto.
"SENIOR MANAGEMENT" shall mean the president, principal financial
officer, principal accounting officer (or, if there is no such accounting
officer, the controller), any vice president of the Public Hub Company in charge
of a principal business unit, division or function (such as sales,
administration or finance) and any other officer who performs a policy-making
function for the Public Hub Company.
"SENIOR NOTE OFFERING" means an issuance by the Public Hub Company of
up to $50,000,000 in aggregate principal amount of notes to institutional
investors if and so long as the indebtedness represented thereby remains on the
terms set forth in Schedule 7.11(g) hereto or (except to the extent approved in
writing by the Agent and Required Lenders) terms and conditions no more
burdensome in any material respect on any member of the Hub Group than those set
forth in such Schedule.
"SUBSIDIARY" means any corporation or other Person more than 50% of the
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Public Hub Company, by one or more of
its Subsidiaries, or by the Public Hub Company and one or more of its
Subsidiaries.
"SWING LINE COMMITMENT" means the commitment of Xxxxxx to make Swing
Loans in the amount set forth opposite its signature hereto under the heading
"Swing Line Commitment".
"SWING LOANS" has the meaning ascribed to that term in Section 1.6
hereof.
"TERM CREDIT COMMITMENTS" means the commitment of the Lenders to make
loans under the Term Credit in the amounts set forth opposite their signatures
hereto under the heading "TERM CREDIT COMMITMENT" and opposite their signatures
on Assignment Agreements delivered pursuant to Section 11.10 hereof under the
heading "TERM CREDIT COMMITMENT".
"TERM LOAN" has the meaning ascribed to that term in Section 1.3
hereof.
"TERM NOTE" is defined in Section 1.3 hereof.
"TOTAL FUNDED DEBT" means, at any time the same is to be determined,
the aggregate of all Indebtedness for Borrowed Money of the Hub Group at such
time, PLUS (without duplication) all Indebtedness for Borrowed Money of any
other Person which is directly or indirectly guarantied by any member of the Hub
32
Group or which any member of the Hub Group has agreed (contingently or
otherwise) to purchase or otherwise acquire or in respect of which any member of
the Hub Group has otherwise assured a creditor against loss. In any
determination of Total Funded Debt, in the event the holder's right of recovery
on any guaranty or similar obligation owed to such holder is limited in writing,
the holder's right of recovery on, the Total Funded Debt attributable to such
guaranty or other instrument shall be the amount to which liability thereon has
been so limited.
"UNFUNDED VESTED LIABILITIES" means, for any Plan at any time, the
amount (if any) by which the present value of all vested nonforfeitable accrued
benefits under such Plan exceeds the fair market value of all Plan assets
allocable to such benefits, all determined as of the then most recent valuation
date for such Plan, but only to the extent that such excess represents a
potential liability of a member of the Controlled Group to the PBGC or the Plan
under Title IV of ERISA.
"VOTING STOCK" of any Person means capital stock or other equity
interest of any class or classes (however designated) having ordinary voting
power for the election of directors or equivalent managers of such Person, other
than stock having such power only by reason of the happening of a contingency.
"WELFARE PLAN" means a "welfare plan" as defined in Section 3(1) of
ERISA.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Public Hub
Company and/or one or more Wholly-Owned Subsidiaries within the meaning of this
definition.
"WORKING CAPITAL" means, at any time the same is to be determined, the
excess, if any, of current assets of the Hub Group minus current liabilities of
the Hub Group, all as determined on a consolidated basis in accordance with
GAAP.
"YEAR 2000 PROBLEM" means any significant risk that computer hardware,
software, or equipment containing embedded microchips essential to the business
or operations of the Borrower or any of its Subsidiaries will not, in the case
of dates or time periods occurring after December 31, 1999, function at least as
efficiently and reliably as in the case of times or time periods occurring
before January 1, 2000, including the making of accurate leap year calculations.
SECTION 4.2. INTERPRETATION. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"HEREOF", "HEREIN", and "HEREUNDER" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement; PROVIDED, HOWEVER, that if any change in
33
GAAP would affect (or would result in a change in the method of calculation of)
any of the covenants set forth in Section 7 or any definition related thereto,
then the Borrowers, the Agent and the Lenders will negotiate in good faith to
amend in accordance with the terms of this Agreement all such covenants and
definitions as would be affected by such change in GAAP to the extent necessary
to maintain the economic terms of such covenants as in effect under this
Agreement immediately prior to giving effect to such changes in GAAP; PROVIDED
FURTHER, HOWEVER, that until the amendment of such covenants and definitions
shall have been agreed upon by the Borrowers and the Required Lenders, the
covenants and definitions in effect immediately prior to such amendment shall
remain in effect and any determination of compliance with any such covenant
shall be construed in accordance with GAAP as in effect immediately prior to
such change in GAAP and consistently applied.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Borrowers and Guarantors jointly and severally represent and
warrant to the Agent and Lenders as follows:
SECTION 5.1. ORGANIZATION AND QUALIFICATION. Each Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the state of its incorporation, has full and adequate corporate power to own
its Property and conduct its business as now conducted, and is duly licensed or
qualified and in good standing in each jurisdiction in which the nature of the
business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified would not be reasonably likely to have a material adverse
effect on the financial condition, Properties, business or operations of the
Public Hub Company or the Hub Group taken as a whole.
SECTION 5.2. CORPORATE AUTHORITY AND VALIDITY OF OBLIGATIONS. Each
Borrower has full right and authority to enter into this Agreement and the other
Loan Documents to perform all of its obligations hereunder and under the other
Loan Documents and in the case of each Borrower, to make the borrowings herein
provided for and to issue its Notes in evidence thereof. The Loan Documents
delivered by each Borrower have been duly authorized, executed and delivered by
such Borrower and constitute valid and binding obligations of such Borrower
enforceable in accordance with their terms except as enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally and general principles of equity
(regardless of whether the application of such principles is considered in a
proceeding in equity or at law); and this Agreement and the other Loan Documents
do not, nor does the performance or observance by each Borrower of any of the
matters and things herein or therein provided for, contravene or constitute a
default under any provision of law or any judgment, injunction, order or decree
binding upon any Borrower or any provision of the charter, articles of
incorporation or by-laws of any Borrower or any material covenant, indenture or
agreement of or affecting any Borrower or any of its Properties, or result in
the creation or imposition of any Lien on any Property of either Borrower.
SECTION 5.3. HUB GROUP. Each Guarantor is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated or organized, as the case may be, has full and adequate power to
34
own its Property and conduct its business as now conducted, and is duly licensed
or qualified and in good standing in each jurisdiction in which the nature of
the business conducted by it or the nature of the Property owned or leased by it
requires such licensing or qualifying, except where the failure to be so
licensed or qualified would not be reasonably likely to have a material adverse
effect on the financial condition, Properties, business or operations of the
Public Hub Company or the Hub Group taken as a whole. The Hub Partnerships and
Subsidiaries (if any) listed on Schedule 5.3 hereto (as updated from time to
time pursuant to Sections 7.13(g) and 7.24 hereof) are the only Affiliates of
the Borrowers engaged in the business of arranging for the movement of
customers' freight by intermodal container or trailer or by truck. Schedule 5.3
hereto (as so updated) identifies under the appropriate subheading each Hub
Partnership and each Subsidiary (if any), the jurisdiction of its incorporation
or organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Public Hub Company, and, if such percentage is not 100% (excluding directors'
qualifying shares as required by law), a description of each class of its
authorized capital stock and other equity interests and the number of shares of
each class issued and outstanding. All of the outstanding shares of capital
stock and other equity interests of each Guarantor are validly issued and
outstanding and all such shares and other equity interests indicated on Schedule
5.3 (as so updated) as owned by the Public Hub Company or any Guarantor, as the
case may be, are so owned, beneficially and of record, by the Public Hub Company
or such Guarantor in each case free and clear of all Liens. There are no
outstanding commitments or other obligations of any Guarantor to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Guarantor. Each
Guarantor has full right, power and authority to execute and deliver this
Agreement or a Guaranty Agreement and any other Loan Documents executed by it
and to perform each and all of the matters and things therein provided for. Each
Loan Document delivered by each Guarantor has been duly authorized, executed and
delivered by such Guarantor and constitutes a valid and binding obligation of
such Guarantor enforceable in accordance with their terms except as
enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether the application of such principles is considered
in a proceeding in equity or at law) and the Loan Documents executed by each
Guarantor do not, nor does the performance or observance by any Guarantor of any
of the matters or things therein provided for, contravene any provision of law
or any provision of any charter, articles of incorporation, by-laws, partnership
agreement or articles of organization, as the case may be, of any Guarantor or
any material covenant, indenture or agreement of or affecting the Public Hub
Company or any Guarantor or any of the Public Hub Company's or such Guarantor's
Property, or result in the creation or imposition of any Lien on any of the
Public Hub Company's or such Guarantor's Property.
SECTION 5.4. USE OF PROCEEDS; MARGIN STOCK. The Borrowers shall use all
proceeds of the Loans solely for (i) working capital purposes in the ordinary
course of their respective business, (ii) to finance the acquisitions permitted
by this Agreement, (iii) to finance Capital Expenditures and (iv) to purchase
all outstanding limited partnership interests of each Hub Partnership. Not more
than 25% of the total assets of the Public Hub Company or of any other member of
the Hub Group consist of margin stock (within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System). No part of the proceeds of
any Loan or any other extension of credit made hereunder will be used to
35
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.
SECTION 5.5. FINANCIAL REPORTS. The consolidated balance sheet of the
Public Hub Company as at December 31, 1998, and the related consolidated
statements of income, retained earnings and cash flows of the Public Hub Company
for the fiscal year then ended, and accompanying notes thereto, which financial
statements are accompanied by the audit report of Xxxxxx Xxxxxxxx LLP,
independent public accountants, heretofore furnished to the Lenders, fairly
present the consolidated financial condition of the Public Hub Company as at
said dates and the consolidated results of their operations and cash flows for
the periods then ended in conformity with GAAP applied on a consistent basis.
Neither the Public Hub Company nor any other member of the Hub Group has
contingent liabilities which are material to it other than as indicated on such
financial statements or, with respect to future periods, on the financial
statements furnished pursuant to Section 7.5 hereof.
SECTION 5.6. NO MATERIAL ADVERSE CHANGE. Since December 31, 1998,
except as disclosed in periodic SEC filings by the Public Hub Company, there has
been no change in the condition (financial or otherwise) or business prospects
of the Public Hub Company or the Hub Group, taken as a whole, except those
occurring in the ordinary course of business, none of which individually or in
the aggregate have been materially adverse.
SECTION 5.7. FULL DISCLOSURE. The statements and information furnished
to the Lenders in connection with the negotiation of this Agreement and the
other Loan Documents and the commitment by the Lenders to provide all or part of
the financing contemplated hereby do not, taken as a whole and other than
financial projections or forecasts, contain any untrue statements of a material
fact or omit a material fact necessary to make the material statements contained
herein or therein not misleading, the Lenders acknowledging that as to any
projections furnished to the Lenders, the Borrowers and Hub Partnerships only
represent that the same were prepared on the basis of information and estimates
the Borrowers believed to be reasonable.
SECTION 5.8. GOOD TITLE. The members of the Hub Group each have good
title to their assets as reflected on the most recent consolidated balance sheet
of the Public Hub Company furnished to the Lenders (except for sales of assets
by the Hub Group in the ordinary course of business), subject to no Liens other
than such thereof as are permitted by Section 7.12 hereof.
SECTION 5.9. LITIGATION AND OTHER CONTROVERSIES. Except as disclosed in
periodic SEC filings by the Public Hub Company, there is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
the Public Hub Company threatened, against the Public Hub Company or any other
member of the Hub Group which if adversely determined would (a) impair the
validity or enforceability of, or impair the ability of any member of the Hub
Group to perform its obligations under, this Agreement or any other Loan
Document or (b) result in any material adverse change in the financial
condition, Properties, business or operations of the Public Hub Company or the
Hub Group taken as a whole.
SECTION 5.10. TAXES. All tax returns with respect to any income tax or
other material tax required to be filed by the Public Hub Company or any other
member of the Hub Group in any jurisdiction have, in fact, been filed, and all
36
taxes, assessments, fees and other governmental charges upon the Public Hub
Company or any other member of the Hub Group or upon any of their respective
Properties, income or franchises, which are shown to be due and payable in such
returns, have been paid. The Borrowers do not know of any proposed additional
tax assessment against any member of the Hub Group for which adequate provision
in accordance with GAAP has not been made on its accounts. Adequate provisions
in accordance with GAAP for taxes on the books of the Public Hub Company and
each other member of the Hub Group have been made for all open years, and for
its current fiscal period.
SECTION 5.11. APPROVALs. No authorization, consent, license, or
exemption from, or filing or registration with, any court or governmental
department, agency or instrumentality, nor any approval or consent of the
stockholders of any Borrower or any other Person, is or will be necessary to the
valid execution, delivery or performance by any Borrower of this Agreement or
any other Loan Document.
SECTION 5.12. AFFILIATE TRANSACTIONS. Neither the Public Hub Company nor
any other member of the Hub Group is a party to any contracts or agreements with
any of its Affiliates on terms and conditions which are less favorable (x) in
the case of any transaction between any Borrower and any Affiliate, to such
Borrower than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other, (y) in the case of a transaction
between any Guarantor and an Affiliate (other than a Borrower), to such
Guarantor than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other and (z) in the case of a
transaction between any member of the Hub Group (other than a Borrower or a
Guarantor) and an Affiliate (other than a Borrower or a Guarantor), to such
member of the Hub Group than would be usual and customary in similar contracts
or agreements between Persons not affiliated with each other.
SECTION 5.13. INVESTMENT COMPANY; PUBLIC UTILITY HOLDING COMPANY.
Neither the Public Hub Company nor any other member of the Hub Group is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or a "public
utility holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION 5.14. ERISA. The Public Hub Company and each other member of its
Controlled Group has fulfilled its obligations under the minimum funding
standards of and is in compliance in all material respects with ERISA and the
Code to the extent applicable to it and has not incurred any liability to the
PBGC or a Plan under Title IV of ERISA other than a liability to the PBGC for
premiums under Section 4007 of ERISA.
SECTION 5.15. COMPLIANCE WITH LAWS. The Public Hub Company and each
other member of the Hub Group are in substantial compliance with the
requirements of all federal, state and local laws, rules and regulations
applicable to or pertaining to their Properties or business operations
(including, without limitation, the Occupational Safety and Health Act of 1970,
the Americans with Disabilities Act of 1990, and laws and regulations
establishing quality criteria and standards for air, water, land and toxic or
hazardous wastes and substances), except insofar as non-compliance with which
would not have a material adverse effect on the financial condition, Properties,
37
business or operations of the Public Hub Company or the Hub Group taken as a
whole. Neither the Public Hub Company nor any other member of the Hub Group has
received written notice to the effect that its operations are not in compliance
with any of the requirements of applicable federal, state or local
environmental, health and safety statutes and regulations or are the subject of
any governmental investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action would have a material
adverse effect on the financial condition, Properties, business or operations of
the Public Hub Company or the Hub Group taken as a whole.
SECTION 5.16. OTHER AGREEMENTS. Neither the Public Hub Company nor any
other member of the Hub Group is in default under the terms of any covenant,
indenture or agreement of or affecting the Public Hub Company, any other member
of the Hub Group or any of their Properties, which default if uncured would have
a material adverse effect on the financial condition, Properties, business or
operations of the Public Hub Company or the Hub Group taken as a whole.
SECTION 5.17. YEAR 2000 COMPLIANCE. The Borrowers have conducted a
comprehensive review and assessment of the computer applications of the
Borrowers and their Subsidiaries, with respect to any defect in their computer
software, data bases, hardware, controls and peripherals related to the
occurrence of the year 2000 or the use at any time of any date which is before,
on and after December 31, 1999, in connection therewith. Based on the foregoing
review, assessment and inquiry, the Borrowers believe that no such defect could
reasonably be expected to have a material adverse effect on the business or
financial affairs of the Public Hub Company or the Hub Group taken as a whole.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of the Lenders to make any Loan or of the Agent to issue
any Letter of Credit under this Agreement is subject to the following conditions
precedent:
SECTION 6.1. ALL ADVANCES. As of the time of the making of each
extension of credit (including the initial extension of credit) hereunder:
(a) each of the representations and warranties set forth in
Section 5 hereof and in the other Loan Documents shall be true and
correct in all material respects as of such time, except to the extent
the same expressly relate to an earlier date;
(b) the Hub Group shall be in full compliance with all of the
terms and conditions of this Agreement and of the other Loan Documents,
and no Default or Event of Default shall have occurred and be
continuing or would occur as a result of making such extension of
credit;
(c) in the case of each Borrowing of Revolving Credit Loans
and each issuance of a Letter of Credit, after giving effect to such
extension of credit, the aggregate principal amount of all Revolving
38
Credit Loans, Swing Loans and L/C Obligations outstanding shall not
exceed the Revolving Credit Commitment then in effect;
(d) in the case of each Swing Loan, after giving effect to
such extension of credit, the aggregate principal amount of all Swing
Loans shall not exceed the lesser of (i) the Swing Line Commitment then
in effect and (ii) the difference between the Revolving Credit
Commitments and the sum of all Revolving Credit Loans and L/C
Obligations then outstanding;
(e) in the case of the issuance of any Letter of Credit, the
Agent shall have received a properly completed Application therefor
together with the fees called for hereby and, in the case of an
extension or increase in the amount of the Letter of Credit, the Agent
shall have received a written request therefor, in a form acceptable to
the Agent; and
(f) such extension of credit shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to the Agent or any Lender (including,
without limitation, Regulation U of the Board of Governors of the
Federal Reserve System) as then in effect.
Any request for a Borrowing or Letter of Credit hereunder shall constitute a
representation and warranty as to the facts specified in subsections (a) through
(d), both inclusive, above.
SECTION 6.2. INITIAL ADVANCE. At or prior to the making of the
initial extension of credit hereunder, the following conditions precedent shall
also have been satisfied:
(a) the Agent shall have received the following for the
account of the Lenders (each to be properly executed and completed) and
the same shall have been approved as to form and substance by each
Lender:
(i) the Notes;
(ii) the Guaranty Agreements from Guarantors not
party hereto;
(iii) copies (executed or certified, as may be
appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Agreement
and the other Loan Documents to the extent the Agent or its
counsel may reasonably request;
(iv) an incumbency certificate containing the name,
title and genuine signatures of each of the Borrowers'
Authorized Representatives;
(b) the Agent shall have received for itself the arrangement
fee called for hereby;
39
(c) legal matters incident to the execution and delivery of
this Agreement and the other Loan Documents and to the transactions
contemplated hereby shall be satisfactory to each Lender and its
counsel; and the Agent shall have received for the account of the
Lenders the favorable written opinion of counsel for the Hub Group in
form and substance satisfactory to the Agent and its counsel;
(d) the Agent shall have received evidence reasonably
satisfactory to it that the aggregate consideration to be expended by
the Hub Group for Hub Chicago's acquisition of all limited partnership
interests in the Hub Partnerships shall not exceed $120,000,000 and
shall be pursuant to a purchase agreement all in form and substance
satisfactory to the Agent and the Required Lenders;
(e) the Agent shall have received evidence reasonably
satisfactory to it that the Public Hub Company shall have received
proceeds of at least $40,000,000 (net only of reasonable underwriting
discounts and commissions and other ordinary and necessary
out-of-pocket expenses incurred by Hub Chicago directly incurred and
payable as a result of such issuance) out of the proceeds of the Bridge
Financing or at least $50,000,000 out of the proceeds of the Senior
Note Offering, that such indebtedness will be incurred on terms and
under agreements reasonably acceptable to the Agent;
(f) the Agent shall have received for the account of the
Lenders a good standing certificate for each Borrower and Guarantor
(dated as of the date no earlier than 10 days prior to the date hereof)
from the office of the secretary of state of the state of its
organization; and
(g) the Agent shall have received for the account of the
Lenders such other agreements, instruments, documents, certificates and
opinions as the Agent or the Lenders may reasonably request.
SECTION 7. COVENANTS.
The Borrowers and Guarantors agree jointly and severally that, so long
as any credit is available to or in use by the Borrowers hereunder, except to
the extent compliance in any case or cases is waived in writing by the Required
Lenders:
SECTION 7.1. MAINTENANCE OF BUSINESS. (a) The Borrowers and Hub
Partnerships shall, and the Public Hub Company shall cause each Subsidiary to,
(x) preserve and maintain its existence and (y) preserve and keep in force and
effect all licenses, permits and franchises necessary to the proper conduct of
its business; PROVIDED, HOWEVER, that the Borrowers, Hub Partnerships and
Subsidiaries (x) may take any action permitted by Section 7.14 hereof, (y) may
dissolve or liquidate any Hub Partnership concurrent with Hub Chicago's or Hub
Holdings' acquisition of all partnership interests therein and (z) may dissolve
or liquidate any Subsidiary or Hub Partnership if (1) such dissolution or
liquidation would not have a material adverse effect on (i) the financial
condition, Properties, business or operations of the Public Hub Company or the
Hub Group taken as a whole, (ii) the ability of any Borrower or Guarantor to
perform its obligations under the Loan Documents, or (iii) the validity or
40
enforceability of any of the Loan Documents of the rights or remedies of the
Agent or any Lender thereunder and (2) in the case of each dissolution or
liquidation of a Guarantor, all the assets of such Guarantor are transferred to
a Borrower or Guarantor in compliance with Section 7.14 hereof.
(b) Without limiting the generality of the foregoing, the Borrowers
shall, or shall cause a Wholly-Owned Subsidiary to, maintain a license from the
Department of Transportation permitting such Borrower or Subsidiary, as the case
may be, to serve as a broker for the Hub Group in arranging for the Hub Group's
transportation of general commodities by motor vehicle.
SECTION 7.2. MAINTENANCE OF PROPERTIES. The Borrowers and Hub
Partnerships shall maintain, preserve and keep its property, plant and equipment
in good repair, working order and condition (ordinary wear and tear excepted)
and shall from time to time make all needful and proper repairs, renewals,
replacements, additions and betterments thereto so that at all times the
efficiency thereof shall be fully preserved and maintained, and the Public Hub
Company shall cause each Subsidiary to do so in respect of Property owned or
used by it.
SECTION 7.3. TAXES AND ASSESSMENTs. The Borrowers and Hub Partnerships
shall duly pay and discharge, and the Public Hub Company shall cause each
Subsidiary to duly pay and discharge, all material taxes, rates, assessments,
fees and governmental charges upon or against it or its Properties, in each case
before the same become delinquent and before penalties accrue thereon, unless
and to the extent that the same are being contested in good faith and by
appropriate proceedings which prevent enforcement of the matter under contest
and adequate reserves are provided therefor.
SECTION 7.4. INSURANCE. The Borrowers and Hub Partnerships shall insure
and keep insured, and the Public Hub Company shall cause each Subsidiary to
insure and keep insured, with good and responsible insurance companies, all
insurable Property owned by it which is of a character usually insured by
Persons similarly situated and operating like Properties against loss or damage
from such hazards and risks, and in such amounts, as are insured by Persons
similarly situated and operating like Properties; and the Companies and Hub
Partnerships shall insure, and the Public Hub Company shall cause each
Subsidiary to insure, such other hazards and risks (including employers' and
public liability risks) with good and responsible insurance companies as and to
the extent usually insured by Persons similarly situated and conducting similar
businesses. Either Company shall upon request furnish to the Agent a certificate
setting forth in summary form the nature and extent of the insurance maintained
pursuant to this Section.
SECTION 7.5. FINANCIAL REPORTS. The Borrowers and Hub Partnerships
shall, and the Public Hub Company shall cause each Subsidiary to, maintain a
standard system of accounting in accordance with GAAP and shall furnish to the
Agent and each Lender and its duly authorized representatives such information
respecting the business and financial condition of the Borrowers and Hub
Partnerships and Subsidiaries as the Agent may reasonably request; and without
any request, shall furnish to the Agent:
(a) as soon as available, and in any event within 45 days
after the close of each fiscal quarter of the Public Hub Company, a
copy of the consolidated balance sheet of the Hub Group as of the last
day of such period and the consolidated statements of income, retained
41
earnings and cash flows of the Hub Group for the quarter and the fiscal
year-to date period then ended, each in reasonable detail showing in
comparative form the figures for the corresponding date and period in
the previous fiscal year, prepared by the Public Hub Company in
accordance with GAAP and certified by its President or chief financial
officer;
(b) as soon as available, and in any event within 90 days
after the close of each annual accounting period of the Public Hub
Company, a copy of the consolidated balance sheet of the Hub Group as
of the close of such period and the consolidated statements of income,
retained earnings and cash flows of the Hub Group for such period, and
accompanying notes thereto, each in reasonable detail showing in
comparative form the figures for the previous fiscal year, accompanied
by an unqualified opinion thereon of Xxxxxx Xxxxxxxx LLP or another
firm of independent public accountants of recognized national standing,
to the effect that the financial statements have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Hub Group as of the close of
such fiscal year and the results of their operations and cash flows for
the fiscal year then ended and that an examination of such accounts in
connection with such financial statements has been made in accordance
with generally accepted auditing standards and, accordingly, such
examination included such tests of the accounting records and such
other auditing procedures as were considered necessary in the
circumstances;
(c) promptly after receipt thereof, any additional written
reports, management letters or other detailed information contained in
writing concerning significant aspects of the operations and financial
affairs of any member of the Hub Group given to it by its independent
public accountants;
(d) as soon as available, and in any event within 60 days
after the close of each annual accounting period of the Public Hub
Company, a copy of the operating budget of the Hub Group for such
period, such budget to project in reasonable detail, cash receipts and
cash uses (broken down month-by-month);
(e) promptly after the sending or filing thereof, copies of
each financial statement, report, notice or proxy statement sent by the
Public Hub Company to its stockholders, and copies of each regular,
periodic or special report, registration statement or prospectus
(including all Form 10-K, Form 10-Q and Form 8-K reports and proxy
statements) filed by the Public Hub Company with any securities
exchange or the SEC or any successor agency; and
(f) promptly after knowledge thereof shall have come to the
attention of any responsible executive officer of any Company, written
notice of any threatened or pending litigation or governmental
proceeding or labor controversy against the Public Hub Company or any
other member of the Hub Group which, if adversely determined, would
materially and adversely affect the financial condition, Properties,
business or operations of the Public Hub Company or the Hub Group taken
as a whole or of the occurrence of any Change of Control Event or any
Default or Event of Default hereunder.
42
Each of the financial statements furnished to the Lenders pursuant to
subsections (a) and (b) of this Section shall be accompanied by a written
certificate in substantially the same form attached hereto as Exhibit B signed
by the President or chief financial officer of the Public Hub Company to the
effect that to the best of such officer's knowledge and belief no Default or
Event of Default has occurred during the period covered by such statements or,
if any such Default or Event of Default has occurred during such period, setting
forth a description of such Default or Event of Default and specifying the
action, if any, taken by the Public Hub Company to remedy the same. Such
certificate shall also set forth the calculations supporting such statements in
respect of Sections 7.7, 7.8, 7.9 and 7.10 of this Agreement. It is understood
and agreed that if and so long as the Public Hub Company files Forms 10-K and
10-Q with the SEC, the Borrowers may deliver such forms to the Agent in lieu of
the information required for the corresponding accounting periods in subsections
(a) and (b) above.
SECTION 7.6. INSPECTION. The Borrowers and Hub Partnerships shall, and
the Public Hub Company shall cause each Subsidiary to, permit the Agent and each
Lender and their duly authorized representatives and agents to visit and inspect
any of the Properties, corporate books and financial records of each member of
the Hub Group, to examine and (subject to Section 11.5 hereof), at the sole cost
and expense of the Lenders, make copies of the books of accounts and other
financial records of each member of the Hub Group, and to discuss the affairs,
finances and accounts of each member of the Hub Group with, and to be advised as
to the same by, its officers, employees and independent public accountants (and
by this provision the Hub Group hereby authorizes such accountants to discuss
with the Agent and any Lender the finances and affairs of each member of the Hub
Group) at such reasonable times and reasonable intervals as the Agent or such
Lender may designate; PROVIDED, HOWEVER, that (i) except upon the occurrence and
during the continuation of any Default or Event of Default, (x) such visitations
and inspections shall be made only with reasonable advance notice to a Company
and during normal business hours of the member of the Hub Group being visited or
inspected and (y) the Agent and each Lender agrees to use reasonable efforts to
coordinate its visits and inspections under this Section so as not to be
unreasonably burdensome on the member of the Hub Group being visited or
inspected and (ii) any discussions between a Lender or the Agent and the Hub
Group's accountants held by virtue of the authority granted by this Section
shall be with the right of an executive officer of the Public Hub Company to be
in attendance.
SECTION 7.7. NET WORTH. The Hub Group shall at all times maintain its
Net Worth at not less than the Minimum Required Amount. For purposes of this
Section 7.7, the term "MINIMUM REQUIRED AMOUNT" shall mean $105,000,000 through
September 29, 1999 and shall increase (but never decrease) as of September 30,
1999 and as of the close of each fiscal quarter of the Public Hub Company
thereafter by twenty-five percent (25%) of Net Income (if positive) for the
fiscal quarter of the Public Hub Company then ended.
SECTION 7.8. FIXED CHARGE COVERAGE RATIO. The Hub Group shall not, as
of the last day of each fiscal quarter of the Public Hub Company (commencing on
March 31, 1999), permit the Fixed Charge Coverage Ratio to be less than (i) 1.15
to 1.0 from the date hereof through and including December 30, 2001 and (ii)
1.25 to 1.0 thereafter.
43
SECTION 7.9. MINIMUM EBITDAM. The Hub Group shall as of the last day of
each fiscal quarter of the Public Hub Company (commencing on March 31, 1999)
maintain EBITDAM for the four fiscal quarters of the Public Hub Company then
ended at not less than (i) $35,000,000 from the date hereof through and
including December 30, 2000 and (ii) $40,000,000 from December 31, 2000 and
thereafter.
SECTION 7.10. CASH FLOW LEVERAGE RATIO. The Hub Group shall as of the
close of each fiscal quarter of the Public Hub Company specified below, permit
the Cash Flow Leverage Ratio as of such date to be more than:
CASH FLOW LEVERAGE
FROM AND TO AND RATIO SHALL NOT BE
INCLUDING INCLUDING MORE THAN:
the date hereof 12/30/99 3.85 to 1
12/31/99 6/29/00 3.75 to 1
6/30/00 12/30/00 3.25 to 1
12/31/00 6/29/01 3.00 to 1
6/30/01 12/30/01 2.75 to 1
12/31/01 and at all times thereafter 2.50 to 1
SECTION 7.11. INDEBTEDNESS FOR BORROWED MONEY. The Borrowers and the Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, issue, incur, assume, create or have outstanding any Indebtedness for
Borrowed Money; PROVIDED, HOWEVER, that the foregoing shall not restrict nor
operate to prevent:
(a) the Obligations;
(b) purchase money indebtedness and Capitalized Lease
Obligations secured by Liens permitted by Section 7.12(d) hereof in an
aggregate amount not to exceed $30,000,000 at any one time outstanding;
(c) indebtedness permitted by Section 7.13(l) hereof;
(d) unsecured indebtedness evidenced by the Dividend Notes;
(e) interest rate protection, currency swap and foreign
exchange arrangements entered into in connection with bona fide hedging
operations;
(f) performance bonds and surety or appeal bonds obtained in
the ordinary course of business;
44
(g) the Bridge Financing and the unsecured indebtedness (in
an aggregate amount not to exceed $50,000,000) on the Senior Note
Offering refinancing the Bridge Financing;
(h) the currently outstanding unsecured indebtedness of Hub
Holdings incurred in connection with the acquisition of Quality
Intermodal Corporation in the approximate amount of $6,000,000;
(i) the currently outstanding unsecured indebtedness
evidenced by the $2,000,000 promissory note made by Hub Group, Inc. in
favor of American President Lines, Inc., due May 2, 1999;
(j) indebtedness of Hub Group Associates, Inc. on its line of
credit with Cass Bank & Trust provided the aggregate principal amount
outstanding thereon does not exceed $5,000,000 at any one time;
(k) indebtedness assumed in an acquisition permitted by
Section 7.13(m) hereof provided such indebtedness is not incurred in
connection with or in contemplation of such acquisition;
(l) initial or successive refinancings of (but not any
increases in) the Indebtedness for Borrowed Money listed in subsections
(d), (g), (h), (i), (j) and (k) above on terms and conditions on the
whole no more burdensome in any material respect on the relevant
obligors;
(m) investments permitted by Section 7.13(g) hereof; and
(n) other indebtedness of the Hub Group aggregating not more
than $10,000,000 at any one time outstanding.
SECTION 7.12. LIENS. The Borrowers and Hub Partnerships shall not, nor
shall the Public Hub Company permit any Subsidiary to, create, incur or permit
to exist any Lien of any kind on any Property owned by the Company or any
Subsidiary; PROVIDED, HOWEVER, that the foregoing shall not apply to nor operate
to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar
charges and Liens in the nature of good faith cash deposits in
connection with tenders, contracts or leases to which any member of the
Hub Group is a party or other cash deposits required to be made in the
ordinary course of business, provided in each case that the obligation
is not for borrowed money and that the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest and
adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords',
carriers' and other similar Liens arising in the ordinary course of
45
business with respect to obligations which are not due or which are
being contested in good faith by appropriate proceedings which prevent
enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an
appeal, stay or discharge in the course of any legal proceeding,
provided that the aggregate amount of liabilities of the Hub Group
secured by a pledge of assets permitted under this subsection,
including interest and penalties thereon, if any, shall not be in
excess of $1,000,000 at any one time outstanding or, if in excess of
$1,000,000, is secured by assets (including cash) not at any time
exceeding $1,000,000 in value;
(d) Liens on property of any member of the Hub Group created
solely for the purpose of securing indebtedness permitted by Section
7.11(b) hereof, representing or incurred to finance, refinance or
refund the purchase price of Property, provided that no such Lien shall
extend to or cover other Property of any member of the Hub Group other
than the respective Property so acquired, and the principal amount of
indebtedness secured by any such Lien shall at no time exceed the
original purchase price of such Property;
(e) banker's Liens and similar Liens (including set-off
rights) in respect of bank deposits;
(f) the retained interest of a lessor in connection with any
lease;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which do not
materially detract from the value of the Property subject thereto; and
(h) Liens on the assets of the Hub Group securing not more
than $5,000,000 of the indebtedness permitted by Section 7.11 hereof.
SECTION 7.13. INVESTMENTS, ACQUISITIONS, LOANS, ADVANCES AND GUARANTIES.
The Borrowers and Hub Partnerships shall not, nor shall the Public Hub Company
permit any Subsidiary to, directly or indirectly, make, retain or have
outstanding any investments (whether through purchase of stock or obligations or
otherwise) in, or loans or advances (other than for travel advances and other
similar cash advances made to officers and employees in the ordinary course of
business) to, any other Person, or acquire all or any substantial part of the
assets or business of any other Person or division thereof, or be or become
liable as endorser, guarantor, surety or otherwise for any debt, obligation or
undertaking of any other Person, or otherwise agree to provide funds for payment
of the obligations of another, or supply funds thereto or invest therein or
otherwise assure a creditor of another against loss, or apply for or become
liable to the issuer of a letter of credit which supports an obligation of
another; PROVIDED, HOWEVER, that the foregoing shall not apply to nor operate to
prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations
constitute full faith and credit obligations of the United States of
America, provided that any such obligations shall mature within one
year of the date of issuance thereof;
46
(b) investments in commercial paper rated at least P-1 by
Xxxxx'x Investors Services, Inc. ("MOODY'S") and at least A-1 by
Standard & Poor's Corporation ("S&P") maturing within 270 days of the
date of issuance thereof;
(c) investments in certificates of deposit issued by any
United States commercial bank having capital and surplus of not less
than $100,000,000 which have a maturity of one year or less or in
eurodollar time deposits maturing not more than one year from the date
of acquisition thereof placed with any such commercial bank;
(d) marketable direct obligations of any State of the United
States or any local government or political subdivision thereof rated
at least AA by S&P or the equivalent thereof by Moody's;
(e) repurchase agreements with a term of not more than seven
days fully collateralized by instruments permitted as investments
hereunder under subsections (a), (b), (c) or (d) above entered into
with any bank meeting the qualifications specified in subsection (c)
above;
(f) investments in money market funds that invest solely, and
which are restricted by their respective charters to invest primarily,
in investments of the type described in subsections (a), (b), (c), (d)
and (e) above;
(g) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(h) interest rate protection, currency swap and foreign
exchange arrangements entered into in connection with bona fide hedging
operations;
(i) accounts or notes receivable arising in the ordinary
course of business;
(j) investments in securities of trade creditors or customers
received in settlement of obligations or pursuant to any plan or
reorganization or similar arrangement upon the bankruptcy or insolvency
or such trade creditors or customers;
(k) the Dividend Notes;
(l) loans and advances by each Borrower to other members of
the Hub Group not otherwise permitted by this Section provided that (i)
the member of the Hub Group receiving such loan or advance either is
(x) a Borrower or Hub Partnership which is a Guarantor and in which
100% of the equity interest is owned, both legally and beneficially, by
any one or more of the Borrowers or (y) if not a Person described in
clause (i)(x) of this subsection (l), a member of the Hub Group which
is or concurrently therewith becomes a Guarantor of the principal of
the Obligations in an amount not less than the principal amount of such
loan or advance and (ii) the aggregate amount of all such loans and
advances permitted by clause (i)(y) of this subsection (l) to all such
Guarantors, taken together, does not exceed $10,000,000 at any one time
outstanding;
47
(m) acquisitions of all or any substantial part of the assets
or business of any other Person or division thereof (the "TARGET")
engaged in the transportation business, or of a majority of the Voting
Stock of such a Person, or of equity interests in any Hub Partnership,
provided in each case that (i) no Default or Event of Default exists or
would exist after giving effect to such acquisition, (ii) the Board of
Directors or other governing body of such Person whose Property, or
Voting Stock or other interests in which, are being so acquired has
approved the terms of such acquisition, (iii) any Borrower shall have
delivered to the Agent an updated Schedule 5.3 to reflect any new
Subsidiary or Hub Partnership resulting from such acquisition; (iv) the
aggregate amount expended by the Hub Group as consideration for such
acquisition (and in any event (1) including as such consideration, any
indebtedness assumed or incurred as a result of such acquisition, and
(2) excluding as such consideration, any equity securities issued by
the Public Hub Company as consideration for such acquisition), when
taken together with the aggregate amount expended as consideration
(including indebtedness and excluding equity securities as aforesaid)
for all other acquisitions permitted under this Section 7.13(m) during
the same fiscal year of the Public Hub Company, does not exceed
$15,000,000; (v) the Target's "EBITDAM" (computed in a manner
consistent with the calculation of EBITDAM for the Borrowers, but
excluding subsection (iv) of the definition of "EBITDAM" herein) for
Target's four most recently completed fiscal quarters is positive; (vi)
the Cash Flow Leverage Ratio (calculated on a pro forma basis as if
such acquisition had occurred on the date of commencement of the fourth
fiscal quarter of the Public Hub Company preceding the date of
acquisition in question) is in compliance with Section 7.10 hereof;
(n) the acquisitions by Hub Chicago or Hub Holdings of all of
the partnership and other equity interests in all Hub Partnerships that
are not Wholly-Owned Subsidiaries on the date hereof which acquisitions
are made substantially concurrent with the initial Loan hereunder;
(o) non-cash consideration received in connection with sales
of Property permitted by Section 7.14 hereof;
(p) loans by Hub Group Associates, Inc. to, or other
investments by Hub Group Associates, Inc. in, the Hub Partnerships and
Subsidiaries (other than the Borrowers and Guarantors), provided such
loans and other investments aggregate not more than $5,000,000 at any
one time outstanding;
(q) investments in, or loans to, Subsidiaries of the Hub
Partnerships engaged primarily in the ordinary course of their
respective businesses in providing drayage services for the Hub Group's
intermodal transportation jobs provided such investments, loans and
advances aggregate not more than $10,000,000 at any one time
outstanding;
(r) Obligations of the Guarantors and the Borrowers under the
Loan Documents; and
(s) any guarantees of the Guarantors and the Borrowers of the
Senior Note Offering and the Bridge Financing.
48
In determining the amount of investments, acquisitions, loans, advances and
guaranties permitted under this Section, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guaranties shall be taken at
the amount of obligations guaranteed thereby, unless specifically limited to a
lesser amount, in which case such guarantee shall be taken at such specified
lesser amount.
SECTION 7.14. MERGERS, CONSOLIDATIONS AND SALES. The Borrowers and Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, be a party to any merger or consolidation, or sell, transfer, lease or
otherwise dispose of all or any substantial part of its Property in a single
transaction or series of related transactions, including any disposition of
Property as part of a sale and leaseback transaction, or in any event sell or
discount (with or without recourse) any of its notes or accounts receivable;
PROVIDED, HOWEVER, that this Section shall not apply to nor operate to prevent
the following:
(a) any member of the Hub Group may sell its inventory in the
ordinary course of its business;
(b) any member of the Hub Group may sell or otherwise dispose
of obsolete and worn out equipment in the ordinary course of its
business; and
(c) any Subsidiary may consolidate with or merge into a
Borrower or a Guarantor so long as:
(i) in the case of such a transaction involving a
Borrower, (1) a Borrower is the surviving or continuing
corporation and (2) the net worth of such Borrower will not be
reduced immediately after giving effect to such transaction;
(ii) subject to the provisions of clause (i) above,
in the case of such a transaction involving a Guarantor, (1) a
Guarantor is the surviving or continuing corporation, (2) the
Borrowers own, both legally and beneficially, at least the
same percentage equity interest in such Guarantor after any
such event as the Borrowers did immediately prior to the
consummation of such event, (3) the net worth of such
Guarantor will not be reduced immediately after giving effect
to such transaction and (4) the Lenders' right of recovery on
such Guarantor's Guaranty Agreement is not limited by its
terms or if limited, equals the sum (if applicable) of the
limits on the rights of recovery on each Guaranty Agreement
(if any) of the parties to such merger or consolidation;
(iii) at the time of such merger or consolidation and
immediately after giving effect thereto, no Default or Event
of Default shall occur or be continuing;
(iv) no litigation shall be pending or threatened
which challenges the validity or propriety of such merger or
consolidation;
(v) the Agent shall have received a certificate from
the President or chief financial officer of the Public Hub
Company confirming that the foregoing conditions set forth in
subsection (c) have been satisfied and such other assurances
49
as the Agent or Required Lenders shall in good faith require
to confirm that such conditions have been satisfied; and
(vi) such merger or consolidation shall have no
material adverse effect on (i) the financial condition,
Properties, business or operations of the Public Hub Company
or the Hub Group taken as a whole, (ii) the ability of any
Borrower or Guarantor to perform its obligations under the
Loan Documents or (iii) the validity or enforceability of any
of the Loan Documents or the rights or remedies of the Agent
or any Lender thereunder;
(d) any Hub Partnership which is a Guarantor may transfer all
its assets to any Wholly-Owned Subsidiary, whether or not in connection
with the dissolution of such Hub Partnership, PROVIDED that
(i) at the time of such transfer and immediately
after giving effect thereto, no Default or Event of Default
shall occur or be continuing;
(ii) the transferee in such transaction immediately
after giving effect thereto shall have a net worth not less
than the net worth of such Guarantor immediately prior to such
transfer;
(iii) such transferee is a Guarantor;
(iv) no litigation shall be pending or threatened
which challenges the validity or propriety of such transfer;
(v) the Agent shall have received a certificate from
the President or chief financial officer of the Public Hub
Company confirming that the foregoing conditions set forth in
this subsection (d) have been satisfied and such other
assurances as the Agent or Required Lenders shall in good
faith require to confirm that such conditions have been
satisfied;
(vi) such transfer shall have no material adverse
effect on (i) the financial condition, Properties, business or
operations of the Public Hub Company or the Hub Group taken as
a whole, (ii) the ability of any Borrower or Guarantor to
perform its obligations under the Loan Documents or (iii) the
validity or enforceability of any of the Loan Documents or the
rights or remedies of the Agent or any Lender thereunder; and
(e) any Borrower may transfer its assets to another Borrower
and any Wholly-Owned Subsidiary which is a Guarantor may transfer its
assets to any Borrower or another Wholly-Owned Subsidiary.
Any sale, lease or other disposition of 15% or more of the total assets of any
Borrower shall be deemed "SUBSTANTIAL" for the foregoing purposes.
SECTION 7.15. MAINTENANCE OF SUBSIDIARIES. The Borrowers and the Hub
Partnerships shall not assign, sell or transfer, and the Public Hub Company
50
shall not permit any Subsidiary to issue, assign, sell or transfer, any equity
interests in a Hub Partnership or Hub Distribution or any shares of capital
stock of or other equity interests in a Subsidiary; PROVIDED that the foregoing
shall not operate to prevent
(a) the issuance, sale and transfer to any Person of any
shares of capital stock of a Subsidiary solely for the purpose of
qualifying, and to the extent legally necessary to qualify, such person
as a director of such Subsidiary;
(b) the issuance of such stock or equity interests to a
member of the Hub Group, provided that in the case of the issuance of
any stock or other equity interest in a Guarantor, 100% of the equity
interest in such Guarantor is owned, both legally and beneficially, by
the Borrowers after giving effect to such issuance; and
(c) any other transfer of any stock or other equity interest
in a Guarantor to any one or more of the Borrowers.
SECTION 7.16. DIVIDENDS BY PUBLIC HUB COMPANY. The Public Hub Company
shall not (a) declare or pay any dividends on or make any other distributions in
respect of any class or series of its capital stock (other than dividends
payable solely in its capital stock) or (b) directly or indirectly purchase,
redeem or otherwise acquire or retire any of its capital stock (such
non-excepted declarations, dividends, distributions, purchases, redemptions and
acquisitions being hereinafter referred to as "RESTRICTED PAYMENTS BY THE PUBLIC
HUB COMPANY") if at the time of any such Restricted Payment by the Public Hub
Company, or immediately after giving effect thereto, any Default or Event of
Default shall occur or be continuing; PROVIDED, HOWEVER, that this Section shall
not prevent the Public Hub Company from paying any dividend within 60 days after
the date of its declaration thereof if at such date of declaration, such
dividend would (if then paid) have complied with this Section.
SECTION 7.17. ERISA. The Borrowers and Hub Partnerships shall, and the
Public Hub Company shall cause each Subsidiary which is a member of its
Controlled Group to, promptly pay and discharge all obligations and liabilities
arising under ERISA of a character which if unpaid or unperformed might result
in the imposition of a Lien against any of its Properties. The Company and Hub
Partnerships shall, and the Public Hub Company shall cause each Subsidiary which
is a member of its Controlled Group to, promptly notify the Agent of (i) the
occurrence of any reportable event (as defined in Section 4043B of ERISA, other
than an event for which the 30-day notice requirement has been waived) with
respect to a Plan, (ii) receipt of any notice from the PBGC of its intention to
seek termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence of any
event with respect to any Plan which would result in the incurrence by any
member of the Controlled Group of any material liability, fine or penalty, or
any material increase in the contingent liability of any member of the
Controlled Group with respect to any post-retirement Welfare Plan benefit, which
liability, contingent liability, fine or penalty would have a material adverse
effect on the financial condition, Properties, business or operations of the
Public Hub Company or the Hub Group taken as a whole.
SECTION 7.18. COMPLIANCE WITH LAWS. The Borrowers, and the Hub
Partnerships shall, and the Public Hub Company shall cause each Subsidiary to,
51
comply in all respects with the requirements of all federal, state and local
laws, rules, regulations, ordinances and orders applicable to or pertaining to
their Properties or business operations, non-compliance with which would have a
material adverse effect on the financial condition, Properties, business or
operations of the Public Hub Company or the Hub Group taken as a whole.
SECTION 7.19. BURDENSOME CONTRACTS WITH AFFILIATES. The Borrowers, and
the Hub Partnerships shall not, nor shall the Public Hub Company permit any
Subsidiary to, enter into any contract, agreement or business arrangement with
any of its Affiliates on terms and conditions which are less favorable to (x) in
the case of a transaction between any Borrower and an Affiliate, to such
Borrower than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other, (y) in the case of a transaction
between any Guarantor and an Affiliate (other than a Borrower), to such
Guarantor than would be usual and customary in similar contracts or agreements
between Persons not affiliated with each other and (z) in the case of a
transaction between any member of the Hub Group (other than a Borrower or a
Guarantor) and an Affiliate (other than a Borrower or a Guarantor), to such
member of the Hub Group than would be usual and customary in similar contracts
or agreements between Persons not affiliated with each other.
SECTION 7.20. NO CHANGES IN FISCAL YEAR. No member of the Hub Group
shall change its fiscal year from its present basis without prior written notice
to the Agent.
SECTION 7.21. FORMATION OF SUBSIDIARIES. Except for existing
Subsidiaries designated on Schedule 5.3 hereto, the Borrowers and Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, form or acquire any Subsidiary without prior written notice to the Agent.
SECTION 7.22. CHANGE IN THE NATURE OF BUSINESS. The Borrowers and Hub
Partnerships shall not, nor shall the Public Hub Company permit any Subsidiary
to, engage in any business or activity if as a result the general nature of any
member of the Hub Group would be changed in any material respect from the
general nature of the business engaged in by any member of the Hub Group on the
date of this Agreement.
SECTION 7.23. GUARANTY. As a condition to establishing or acquiring (i)
any Hub Partnership (other than a Foreign Partnership) in which 100% of the
equity interest is owned directly or indirectly, by one or more of the Borrowers
or (ii) any Wholly-Owned Subsidiary (other than any Foreign Subsidiary), unless
the Lenders otherwise agree in their sole discretion, the Borrowers shall (i)
cause such Hub Partnership or Wholly-Owned Subsidiary, as the case may be, to
execute a Guaranty Agreement, (ii) cause such Hub Partnership or Wholly-Owned
Subsidiary to deliver documentation similar to that described in Sections
6.2(a)(ii), 6.2(a)(iii), 6.2(c) and 6.2(d) hereof relating to the authorization
for, execution and delivery of, and validity of, such Hub Partnership's or
Wholly-Owned Subsidiary's obligations as a Guarantor and otherwise hereunder in
form and substance satisfactory to the Agent, and (iii) deliver an updated
Schedule 5.3 to reflect the new Hub Partnership or Wholly-Owned Subsidiary.
SECTION 7.24. INTEREST RATE PROTECTION. On or before the date hereof,
the Borrowers will hedge their interest rate risk on $25,000,000 of the
principal amount outstanding on the Loans, through the use of one or more
Hedging Arrangements for a minimum of three years, with all of the foregoing to
52
effectively limit the amount of interest that the Borrowers must pay on notional
amounts of not less than such portion of the Loans to not more than a rate
acceptable to the Agent in its discretion and to be with the Lenders, their
respective Affiliates or with other parties reasonably acceptable to the
Required Lenders. If the Borrowers enter into any Hedging Arrangements with any
Lender, the Borrowers' obligations to such Lender in connection with such
Hedging Arrangements do not constitute usage of the Commitments of such Lender.
SECTION 7.25. YEAR 2000 ASSESSMENT. The Hub Group shall take reasonable
action to remedy any failure by its computer-based and other systems to
effectively process dates, including dates before, on and after January 1, 2000,
without experiencing any Year 2000 Problem to the extent such failure is within
the Hub Group's power to remedy and the failure to remedy such failure would
reasonably be expected to have a material adverse effect on the business or
financial affairs of the Public Hub Company or the Hub Group taken as a whole.
At the request of the Agent, the Hub Group will provide the Agent with such
information as the Agent may reasonably request as to the capability of the Hub
Group to conduct its business and operations before, on and after January 1,
2000, without experiencing a Year 2000 Problem causing a material adverse effect
on the business or financial affairs of the Public Hub Company or the Hub Group
taken as a whole.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
SECTION 8.1. EVENTS OF DEFAULT. Any one or more of the following
shall constitute an "EVENT OF DEFAULT" hereunder:
(a) default in the payment when due of all or any part of the
principal of any Note (whether at the stated maturity thereof or at any
other time provided for in this Agreement) or of any reimbursement
obligation owing under any Application; or
(b) default for more than three (3) Business Days in the
payment when due of any part of the interest on any Note (whether at
the stated maturity thereof or at any other time provided for in this
Agreement) or in the payment when due of any fee or other Obligation
payable by any Borrower hereunder or under any other Loan Document; or
(c) default in the observance or performance of Section 7.11
hereof if the aggregate amount of Indebtedness for Borrowed Money
incurred in contravention of such Section (whether or not in the same
transaction) exceeds $1,000,000; default in the observance or
performance of Section 7.12 hereof if the amount of obligations secured
by Liens prohibited by such Section (whether or not in the same
transaction) exceeds $1,000,000; default in the observance or
performance of any covenant set forth in Section 7.13 hereof if the
aggregate amount of investments, loans, advances and guarantees made in
contravention of such Section (whether or not in the same transaction)
aggregate in excess of $1,000,000; or default in the observance or
performance of Section 7.14 or 7.16 hereof;
(d) any other default in the observance or performance of any
of Sections 7.11, 7.12 or 7.13 hereof or default in the observance or
performance of any other provision hereof or of any other Loan Document
which default in each case is not remedied within thirty (30) days
after the earlier of (i) the date on which such failure shall first
become known to any executive officer of any Borrower or (ii) written
notice thereof is given to any Borrower by the Agent or any Lender; or
(e) any representation or warranty made by any Borrower or
any Guarantor herein or in any other Loan Document, or in any statement
or certificate furnished by it pursuant hereto or thereto, or in
53
connection with any extension of credit made hereunder, proves untrue
in any material respect as of the date of the issuance or making
thereof; or
(f) any of the Loan Documents shall for any reason not be or
shall cease to be in full force and effect with respect to any Borrower
or any Guarantor, or any of the Loan Documents is declared to be null
and void as a result of any challenge brought by any Borrower or any
Guarantor; or
(g) default shall occur under any Indebtedness for Borrowed
Money issued, assumed or guarantied by the Hub Group or any Subsidiary
in an aggregate amount exceeding $1,000,000, or under any indenture,
agreement or other instrument under which the same may be issued, and
such default shall continue for a period of time sufficient to permit
the acceleration of the maturity of any such Indebtedness for Borrowed
Money (whether or not such maturity is in fact accelerated), or any
such Indebtedness for Borrowed Money shall not be paid when due
(whether by lapse of time, acceleration or otherwise); or
(h) any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount more than $1,000,000 in excess of the amount covered
by insurance from an insurer who has acknowledged its liability thereon
shall be entered or filed against the Hub Group or any Subsidiary or
against any of their Property and which remains unvacated, unbonded,
unstayed or unsatisfied for a period of 30 days; or
(i) any Borrower or any member of its Controlled Group shall
fail to pay when due an amount or amounts aggregating in excess
$1,000,000 which it shall have become liable to pay to the PBGC or to a
Plan under Title IV of ERISA; or notice of intent to terminate a Plan
or Plans having aggregate Unfunded Vested Liabilities in excess of
$1,000,000 (collectively, a "MATERIAL PLAN") shall be filed under Title
IV of ERISA by any Borrower or any other member of its Controlled
Group, any plan administrator or any combination of the foregoing; or
the PBGC shall institute proceedings under Title IV of ERISA to
terminate or to cause a trustee to be appointed to administer any
Material Plan or a proceeding shall be instituted by a fiduciary of any
Material Plan against any Borrower or any member of its Controlled
Group to enforce payment of a withdrawal liability in excess of
$1,000,000 under Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or
(j) any member of the Hub Group shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make an
54
assignment for the benefit of creditors, (iv) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code,
as amended, to adjudicate it insolvent, or seeking dissolution, winding
up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed
against it, (vi) take any corporate action in furtherance of any matter
described in parts (i) through (v) above, or (vii) fail to contest in
good faith any appointment or proceeding described in Section 8.1(k)
hereof; or
(k) a custodian, receiver, trustee, examiner, liquidator or
similar official shall be appointed for any member of the Hub Group or
any substantial part of any of its Property, or a proceeding described
in Section 8.1(j)(v) shall be instituted against any member of the Hub
Group, and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 60 days.
SECTION 8.2. NON-BANKRUPTCY DEFAULTS. When any Event of Default
described in subsection (a) through (i), both inclusive, of Section 8.1 has
occurred and is continuing, the Agent shall, upon the request of the Required
Lenders, by notice to any Borrower, take one or more of the following actions:
(a) terminate the obligations of the Lenders to extend any
further credit hereunder on the date (which may be the date thereof)
stated in such notice;
(b) declare the principal of and the accrued interest on the
Notes to be forthwith due and payable and thereupon the Notes,
including both principal and interest and all fees, charges and other
Obligations payable hereunder and under the other Loan Documents, shall
be and become immediately due and payable without further demand,
presentment, protest or notice of any kind; and
(c) enforce any and all rights and remedies available to it
under the Loan Documents or applicable law.
SECTION 8.3. BANKRUPTCY DEFAULTS. When any Event of Default described
in subsection (j) or (k) of Section 8.1 has occurred and is continuing, then the
Notes, including both principal and interest, and all fees, charges and other
Obligations payable hereunder and under the other Loan Documents, shall
immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligations of the Lenders to extend further credit
pursuant to any of the terms hereof shall immediately terminate. In addition,
the Agent may exercise any and all remedies available to it under the Loan
Documents or applicable law.
SECTION 8.4. COLLATERAL FOR UNDRAWN LETTERS OF CREDIT. When any Event
of Default, other than an Event of Default described in subsection (j) or (k) of
Section 8.1, has occurred and is continuing, the Companies shall, upon demand of
the Agent (which demand shall be made upon the request of the Required Lenders),
and when any Event of Default described in subsection (j) or (k) of Section 8.1
55
has occurred the Borrowers shall, without notice or demand from the Agent,
immediately pay to the Agent the full amount of each Letter of Credit then
outstanding, the Borrowers agreeing to immediately make such payment and
acknowledging and agreeing that the Agent and the Lenders would not have an
adequate remedy at law for failure of any Borrower to honor any such demand and
that the Agent and the Lenders shall have the right to require the Borrowers to
specifically perform such undertaking whether or not any draws have been made
under any such Letters of Credit.
SECTION 9. THE AGENT
SECTION 9.1. APPOINTMENT AND AUTHORIZATION. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders expressly agree that
the Agent is not acting as a fiduciary of the Lenders in respect of the Loan
Documents, the Borrowers or otherwise, and nothing herein or in any of the other
Loan Documents shall result in any duties or obligations on the Agent or any of
the Lenders except as expressly set forth herein. Subject to the appointment of
a successor Agent as specified below, the Agent may resign at any time by
sending 20 days prior written notice to any Borrower and the Lenders. In the
event of any such resignation, the Required Lenders may appoint a new agent with
(except if any Event of Default then exists) the consent of the Public Hub
Company (which consent shall not be unreasonably withheld), which shall succeed
to all the rights, powers and duties of the Agent hereunder and under the other
Loan Documents. Any resigning Agent shall be entitled to the benefit of all the
protective provisions hereof with respect to its acts as an agent hereunder, but
no successor Agent shall in any event be liable or responsible for any actions
of its predecessor. If the Agent resigns and no successor is appointed, the
rights and obligations of such Agent shall be automatically assumed by the
Required Lenders and the Borrowers shall be directed to make all payments due
each Lender hereunder directly to such Lender.
SECTION 9.2. RIGHTS AS A LENDER. The Agent has and reserves all of the
rights, powers and duties hereunder and under the other Loan Documents as any
Lender may have and may exercise the same as though it were not the Agent and
the terms "LENDER" or "LENDERS" as used herein and in all of such documents
shall, unless the context otherwise expressly indicates, include the Agent in
its individual capacity as a Lender.
SECTION 9.3. STANDARD OF CARE. The Lenders acknowledge that they have
received and approved copies of the Loan Documents and such other information
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent makes no representations
or warranties of any kind or character to the Lenders with respect to the
validity, enforceability, genuineness, perfection, value, worth or
collectibility hereof or of the Notes or any of the other Obligations or of any
of the other Loan Documents. Neither the Agent nor any director, officer,
employee, agent or representative thereof (including any security trustee
therefor) shall in any event be liable for any clerical errors or errors in
judgment, inadvertence or oversight, or for action taken or omitted to be taken
by it or them hereunder or under the other Loan Documents or in connection
herewith or therewith except for its or their own gross negligence or willful
56
misconduct. The Agent shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, certificate,
warranty, instruction or statement (oral or written) of anyone (including anyone
in good faith believed by it to be authorized to act on behalf of the
Borrowers), unless it has actual knowledge of the untruthfulness of same. The
Agent may execute any of its duties hereunder by or through employees, agents,
and attorneys-in-fact and shall not be answerable to the Lenders for the default
or misconduct of any such agents or attorneys-in-fact selected with reasonable
care. The Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agencies hereby created and its duties hereunder, and shall
incur no liability to anyone and be fully protected in acting upon the advice of
such counsel. The Agent shall be entitled to assume that no Default or Event of
Default exists unless specifically notified in writing to the contrary by a
Lender or any member of the Hub Group. The Agent shall in all events be fully
protected in acting or failing to act in accord with the instructions of the
Required Lenders. The Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
the Agent by reason of taking or continuing to take any such action. The Agent
may treat the owner of any Note as the holder thereof until written notice of
transfer shall have been filed with the Agent signed by such owner in form
satisfactory to the Agent. Each Lender acknowledges that it has independently
and without reliance on the Agent or any other Lender and based upon such
information, investigations and inquiries as it deems appropriate made its own
credit analysis and decision to extend credit to the Borrowers. It shall be the
responsibility of each Lender to keep itself informed as to the creditworthiness
of the Hub Group and the Agent shall have no liability to any Lender with
respect thereto.
SECTION 9.4. COSTS AND EXPENSES. Each Lender agrees to reimburse the
Agent for all costs and expenses suffered or incurred by the Agent or any
security trustee in performing its duties hereunder and under the other Loan
Documents, or in the exercise of any right or power imposed or conferred upon
the Agent hereby or thereby, to the extent that the Agent is not promptly
reimbursed for same by the Borrowers, all such costs and expenses to be borne by
the Lenders ratably in accordance with the amounts of their respective
Commitments. If any Lender fails to reimburse the Agent for such Lender's share
of any such costs and expenses, such costs and expenses shall be paid pro rata
by the remaining Lenders, but without in any manner releasing the defaulting
Lender from its liability hereunder.
SECTION 9.5. INDEMNITY. The Lenders shall ratably, in accordance with
its Percentage, indemnify and hold the Agent, and its directors, officers,
employees, agents and representatives (including as such any security trustee
therefor) harmless from and against any liabilities, losses, costs and expenses
suffered or incurred by them hereunder or under the other Loan Documents or in
connection with the transactions contemplated hereby or thereby, regardless of
when asserted or arising, except to the extent they are promptly reimbursed for
the same by the Borrowers and except to the extent that any event giving rise to
a claim was caused by the gross negligence or willful misconduct of the party
seeking to be indemnified. If any Lender defaults in its obligations hereunder,
its share of the obligations shall be paid pro rata by the remaining Lenders,
but without in any manner releasing the defaulting Lender from its liability
hereunder.
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SECTION 10. JOINT AND SEVERAL LIABILITY AND GUARANTIES.
SECTION 10.1. JOINT AND SEVERAL LIABILITY AND GUARANTIES. To induce the
Lenders to provide the credit described herein and in consideration of benefits
expected to accrue to each Guarantor by reason of the Commitments and for other
good and valuable consideration, receipt of which is hereby acknowledged, each
Borrower, each Hub Partnership party hereto and each Hub Partnership in which
100% of the equity interest is owned on or at any time after the date hereof by
one or more of the Borrowers and each Wholly-Owned Subsidiary and each other
member of the Hub Group which executes and delivers a Guaranty Agreement (the
Borrowers and such Hub Partnerships, Subsidiaries and other members of the Hub
Group being hereinafter referred to individually as a "GUARANTOR" and
collectively as the "GUARANTORS") hereby unconditionally and irrevocably
guarantee jointly and severally to the Agent, the Lenders and each other holder
of any of the Obligations and Hedging Liability, and each Borrower hereby
unconditionally and irrevocably agrees to be jointly and severally liable to the
Agent, the Lenders and such holders for, the due and punctual payment of all
present and future Obligations and Hedging Liability (collectively, "GUARANTEED
LIABILITIES") as and when the same shall become due and payable, whether at
stated maturity, by acceleration or otherwise, according to the terms hereof and
thereof. In case of failure by the Borrowers punctually to pay any Guaranteed
Liabilities guarantied hereby or for which the Borrowers agree hereby to be
jointly and severally liable, each Guarantor hereby unconditionally agrees
jointly and severally to make such payment or to cause such payment to be made
punctually as and when the same shall become due and payable, whether at stated
maturity, by acceleration or otherwise, and as if such payment were made by the
Borrowers.
SECTION 10.2. GUARANTY UNCONDITIONAL. The obligations of each Guarantor
as a guarantor or joint and several obligor under the Loan Documents, including
this Section 10, shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of any Borrower or of any other
Guarantor under this Agreement or any other Loan Document or by
operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document;
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting, the Borrowers, any other Guarantor, or
any of their respective assets, or any resulting release or discharge
of any obligation of any Borrower or of any other Guarantor contained
in any Loan Document;
(d) the existence of any claim, set-off or other rights which
the Guarantor may have at any time against the Agent, any Lender or any
other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or
remedies against any Borrower, any other Guarantor or any other Person
or Property;
58
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of any Borrower, regardless of
what obligations of the Borrowers remain unpaid;
(g) any invalidity or unenforceability relating to or against
any Borrower or any other Guarantor for any reason of this Agreement or
of any other Loan Document or any provision of applicable law or
regulation purporting to prohibit the payment by the Borrowers or any
other Guarantor of the principal of or interest on any Note or any
other amount payable by them under the Loan Documents; or
(h) any other act or omission to act or delay of any kind by
the Agent, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the obligations of the
Guarantors under the Loan Documents.
SECTION 10.3. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. Each Guarantor's obligations under this Section 10 shall
remain in full force and effect until the Commitments are terminated and the
principal of and interest on the Notes and all other amounts payable by the
Borrowers under this Agreement and all other Loan Documents shall have been paid
in full. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrowers under the Loan Documents is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of any Borrower or of any Guarantor, or otherwise,
each Guarantor's obligations under this Section 10 with respect to such payment
shall be reinstated at such time as though such payment had become due but had
not been made at such time.
SECTION 10.4. WAIVERS. (a) GENERAL. Each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by the
Agent, any Lender or any other Person against the Borrowers, another Guarantor
or any other Person.
(b) SUBROGATION AND CONTRIBUTION. Each Guarantor hereby agrees not to
exercise or enforce any right of exoneration, contribution, reimbursement,
recourse or subrogation available to such Guarantor against any Person liable
for payment of the Guaranteed Liabilities, or as to any security therefor,
unless and until the full amount owing on the Guaranteed Liabilities has been
paid and the Commitments have terminated; and the payment by such Guarantor of
any amount pursuant to any of the Loan Documents on account of credit extended
to any other Borrower shall not in any way entitle such Guarantor to any right,
title or interest (whether by way of subrogation or otherwise) in and to any of
the Guaranteed Liabilities or any proceeds thereof or any security therefor
unless and until the full amount owing on the Guaranteed Liabilities has been
paid and the Commitments have terminated.
SECTION 10.5. LIMIT ON RECOVERY. Notwithstanding any other provision
hereof or of the Notes, the right of recovery against each Guarantor under this
Section 10 or against a Borrower on the Notes issued by it shall not (to the
extent required by or as may be necessary or desirable to ensure the
enforceability against such Guarantor of its obligations hereunder or thereunder
in accordance with the laws of the jurisdiction of its incorporation or where it
carries on business) exceed (x) the amount which would render such Guarantor's
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obligations under this Section 10 and the Notes void or voidable under
applicable law, including without limitation fraudulent conveyance law minus (y)
$1.00.
SECTION 10.6. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Borrowers under this Agreement or any other
Loan Document is stayed upon the insolvency, bankruptcy or reorganization of any
of the Borrowers, all such amounts otherwise subject to acceleration under the
terms of this Agreement or the other Loan Documents shall nonetheless be payable
jointly and severally by the Guarantors hereunder forthwith on demand by the
Agent made at the request of the Required Lenders.
SECTION 10.7. BENEFIT TO GUARANTORS. All of the Guarantors are engaged
in related businesses and integrated to such an extent that the financial
strength and flexibility of each Guarantor has a direct impact on the success of
each other Guarantor. Each Guarantor will derive substantial direct and indirect
benefit from the extension of credit hereunder.
SECTION 10.8. GUARANTOR COVENANTS. Each Guarantor shall take such action
as any Borrower is required by this Agreement to cause such Guarantor to take,
and shall refrain from taking such action as any Borrower is required by this
Agreement to prohibit such Guarantor from taking.
SECTION 11. MISCELLANEOUS.
SECTION 11.1. WITHHOLDING TAXES. (a) PAYMENTS FREE OF WITHHOLDING.
Except as otherwise required by law and subject to Section 11.1(b) hereof, each
payment by any Borrower under this Agreement and under any other Loan Document
shall be made without withholding for or on account of any present or future
taxes (other than overall net income taxes and franchise taxes on the recipient)
imposed by or within the jurisdiction in which such Borrower is domiciled, any
jurisdiction from which such Borrower makes any payment, or (in each case) any
political subdivision or taxing authority thereof or therein. If any such
withholding is so required, the Borrowers shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay such additional
amount as may be necessary to ensure that the net amount actually received by
each Lender and the Agent free and clear of such taxes (including such taxes on
such additional amount) is equal to the amount which that Lender or the Agent
(as the case may be) would have received had such withholding not been made. If
the Agent or any Lender pays any amount in respect of any such taxes, penalties
or interest, the Borrower shall reimburse the Agent or such Lender for that
payment on demand in the currency in which such payment was made. If any
Borrower pays any such taxes, penalties or interest, it shall deliver official
tax receipts evidencing that payment or certified copies thereof to the Lender
or Agent on whose account such withholding was made (with a copy to the Agent if
not the recipient of the original) on or before the thirtieth day after payment.
(b) U.S. WITHHOLDING TAX EXEMPTIONS. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) (a
"NON-U.S. LENDER") represents and warrants to the Borrowers and the Guarantors
that as of the date such Person first becomes a Lender hereunder, payments made
hereunder to such Lender are exempt from withholding of United States federal
income taxes. Each Non-U.S. Lender agrees that such Lender shall submit to any
Borrower and the Agent on or before the earlier of the date the initial
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Borrowing is made hereunder and 30 days after the date hereof (or, if such
Lender is an assignee lender under Section 11.10 and was not previously a Lender
hereunder, within 30 days of first becoming a Lender), two duly completed and
signed copies of either Form 1001 (relating to such Lender and entitling it to a
complete exemption from withholding under the Code on all amounts to be received
by such Lender, including fees, pursuant to the Loan Documents and the Loans) or
Form 4224 (relating to such Lender and entitling it to a complete exemption from
withholding under the Code on all amounts to be received by such Lender,
including fees, pursuant to the Loan Documents and the Loans) of the United
States Internal Revenue Service. Thereafter and from time to time, each Lender
shall submit to any Borrower and the Agent such additional duly completed and
signed copies of one or the other of such Forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) requested by any Borrower in a written notice,
directly or through the Agent, to such Lender and (ii) required under
then-current United States law or regulations to avoid or reduce United States
withholding taxes on payments in respect of all amounts to be received by such
Lender, including fees, pursuant to the Loan Documents or the Loans.
(c) INABILITY OF BANK TO SUBMIT FORMS. If any Lender determines, as a
result of any change in applicable law, regulation or treaty, or in any official
application or interpretation thereof which occurs after such Lender becomes a
Lender hereunder, that it is unable to submit to any Borrower or the Agent any
form or certificate that such Lender is obligated to submit pursuant to
subsection (b) of this Section 11.1 or that such Lender is required to withdraw
or cancel any such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Lender shall
promptly notify any Borrower and Agent of such fact and the Lender shall to that
extent not be obligated to provide any such form or certificate and will be
entitled to withdraw or cancel any affected form or certificate, as applicable.
Notwithstanding the foregoing, the Borrowers shall not be required to pay any
additional amounts to the Agent or any Lender pursuant to Section 11.1(a) hereof
to the extent that the obligation to pay such additional amounts would not have
arisen but for a failure by the Agent or such Lender to comply with the
provisions of Section 11.1(b).
SECTION 11.2. NON-BUSINESS DAYS. If any payment hereunder becomes due
and payable on a day which is not a Business Day, the due date of such payment
shall be extended to the next succeeding Business Day on which date such payment
shall be due and payable. In the case of any payment of principal falling due on
a day which is not a Business Day, interest on such principal amount shall
continue to accrue during such extension at the rate per annum then in effect,
which accrued amount shall be due and payable on the next scheduled date for the
payment of interest.
SECTION 11.3. NO WAIVER, CUMULATIVE REMEDIES. No delay or failure on the
part of any Lender or on the part of any holder of any of the Obligations in the
exercise of any power or right shall operate as a waiver thereof or as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof or the exercise of
any other power or right. The rights and remedies hereunder of the Lenders and
any of the holders of the Obligations are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
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SECTION 11.4. WAIVERS, MODIFICATIONS AND AMENDMENTS. Any provision
hereof or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
PROVIDED, HOWEVER, that:
(a) no such amendment, modification or waiver shall increase
the amount or extend the term of any Lender's Commitment or reduce the
amount of any principal of or interest rate applicable to, or extend
the maturity of, any Obligation owed to any Lender or reduce the amount
of the fees to which any Lender is entitled hereunder, in each case
without the consent of such Lender; and
(b) without the consent of all Lenders, no such amendment,
modification, or waiver shall release any Guaranty Agreement or waive
any requirement hereunder for a Guaranty Agreement or change this
Section or change the definition of "REQUIRED LENDERS" or change the
number of Lenders required to take any action hereunder or under any of
the other Loan Documents.
No amendment, modification or waiver of the Agent's protective provisions shall
be effective without the prior written consent of the Agent.
SECTION 11.5. COSTS AND EXPENSES. The Borrowers agree to pay on demand
the reasonable costs and expenses of the Agent in connection with the
negotiation, preparation, execution and delivery of this Agreement, the other
Loan Documents and the other instruments and documents to be delivered hereunder
or thereunder, and in connection with the transactions contemplated hereby or
thereby, and in connection with any consents hereunder or waivers or amendments
hereto or thereto, including the reasonable fees and expenses of Messrs. Xxxxxxx
and Xxxxxx, counsel for the Agent, with respect to all of the foregoing (whether
or not the transactions contemplated hereby are consummated). The Borrowers
further agree to pay to Agent and the Lenders and any other holders of the
Obligations all reasonable costs and expenses (including court costs and
reasonable attorneys' fees), if any, incurred or paid by the Agent, the Lenders
or any other holders of the Obligations in connection with any Event of Default
or in connection with the enforcement of this Agreement or any of the other Loan
Documents or any other instrument or document delivered hereunder or thereunder.
The Borrowers further agree to indemnify and save the Lenders, the Agent and any
security trustee for the Lenders harmless from any and all liabilities, losses,
costs and expenses incurred by the Lenders or the Agent in connection with any
action, suit or proceeding brought against the Agent, or any security trustee or
any Lender by any Person (but excluding attorneys' fees for litigation solely
between the Lenders to which any Borrower is not a party) which arises out of
the transactions contemplated or financed hereby or out of any action or
inaction by the Agent, any security trustee or any Lender hereunder or
thereunder, except for such thereof as is caused by the gross negligence or
willful misconduct of the party seeking to be indemnified. The provisions of
this Section and the protective provisions of Section 2 hereof shall survive
payment of the Obligations.
SECTION 11.6. DOCUMENTARY TAXES. The Borrowers agree to pay on demand
any documentary, stamp or similar taxes payable in respect of this Agreement or
any other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit is then in use or available hereunder.
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SECTION 11.7. SURVIVAL OF REPRESENTATIONS. All representations and
warranties made herein or in any of the other Loan Documents or in certificates
given pursuant hereto or thereto shall survive the execution and delivery of
this Agreement and the other Loan Documents, and shall continue in full force
and effect with respect to the date as of which they were made as long as any
credit is in use or available hereunder.
SECTION 11.8. SURVIVAL OF INDEMNITIES. All indemnities and other
provisions relative to reimbursement to the Agent and the Lenders of amounts
sufficient to protect the yield of the Agent and the Lenders with respect to the
Loans and Letters of Credit, including, but not limited to, Sections 1.4, 2.7,
and 2.9 hereof, shall survive the termination of this Agreement and the payment
of the Obligations.
SECTION 11.9. PARTICIPATIONS. Any Lender may grant participations in its
extensions of credit hereunder to any other Lender or other lending institution
(a "PARTICIPANT"), provided that (i) no Participant shall thereby acquire any
direct rights under this Agreement, (ii) no Lender shall agree with a
Participant not to exercise any of such Lender's rights hereunder without the
consent of such Participant except for rights which under the terms hereof may
only be exercised by all Lenders and (iii) no sale of a participation in
extensions of credit shall in any manner relieve the selling Lender of its
obligations hereunder.
SECTION 11.10. ASSIGNMENT AGREEMENTS. Each Lender may, from time to time
upon at least five Business Days' prior written notice to the Agent, assign to
other commercial lenders part of its rights and obligations under this Agreement
(including without limitation the indebtedness evidenced by the Notes then owned
by such assigning Lender, together with an equivalent proportion of its
Commitments to make Loans hereunder) pursuant to written agreements executed by
such assigning Lender, such assignee lender or lenders, the Borrowers and the
Agent, which agreements shall specify in each instance the portion of the
indebtedness evidenced by the Notes which is to be assigned to each such
assignee lender and the portion of the Percentage of the Commitments of the
assigning Lender to be assumed by it (the "ASSIGNMENT AGREEMENTS"); PROVIDED,
HOWEVER, that (i) each such assignment shall be of a constant, and not a
varying, percentage of the assigning Lender's rights and obligations under this
Agreement and the assignment shall cover the same percentage of such Lender's
Percentage of the Commitments, Revolving Loans, Revolving Credit Notes and
credit risk with respect to Letters of Credit and Swing Loans; (ii) unless the
Agent and (except during an Event of Default) the Borrowers otherwise consent,
the aggregate amount of the Commitments, Loans, Notes and credit risk with
respect to Letters of Credit and Swing Loans of the assigning Lender being
assigned pursuant to each such assignment (determined as of the effective date
of the relevant Assignment Agreement) shall in no event be less than $5,000,000
and shall be an integral multiple of $1,000,000; (iii) the Swing Loans and Swing
Line Commitment shall only be assigned (if at all) in total; (iv) the Agent and
(except during any Event of Default ) any of the Borrowers must each consent,
which consent shall not be unreasonably withheld, to each such assignment to a
party which was not already a Lender party to this Agreement or any Affiliate of
such Lender; (v) the assigning Lender must pay to the Agent a processing and
recordation fee of $3,500 and any out-of-pocket attorneys' fees and expenses
incurred by the Agent in connection with such Assignment Agreement and (vi) no
assignment or delegation may be made if, at the time of and by reason of such
assignment and delegation, any Borrower would then be obligated to pay any
amount under Sections 1.4(e), 2.5, 2.6, 2.7, 2.8 or 11.1 hereof in excess of
63
what it would have been required to pay thereunder had no such assignment been
made. Upon the execution of each Assignment Agreement by the assigning Lender
thereunder, the assignee lender thereunder, the Borrowers and the Agent and
payment to such assigning Lender by such assignee lender of the purchase price
for the portion of the indebtedness of the Borrowers being acquired by it, (i)
such assignee lender shall thereupon become a "LENDER" for all purposes of this
Agreement with Commitments in the amounts set forth in such Assignment Agreement
and with all the rights, powers and obligations afforded a Lender hereunder,
(ii) such assigning Lender shall have no further liability for funding the
portion of its Commitments assumed by such other Lender and (iii) the address
for notices to such assignee Lender shall be as specified in the Assignment
Agreement executed by it. Concurrently with the execution and delivery of such
Assignment Agreement, the Borrowers shall execute and deliver Notes to the
assignee Lender in the respective amounts of its Percentage of its Commitments
under the Revolving Credit and Swing Line and its Term Loan and new Notes to the
assigning Lender in the respective amounts of its Percentage of its Revolving
Credit Commitment and its Term Loan after giving effect to the reduction
occasioned by such assignment, all such Notes to constitute "NOTES" for all
purposes of this Agreement and of the other Loan Documents.
SECTION 11.11. NOTICES. Except as otherwise specified herein, all notices
hereunder shall be in writing (including, without limitation, notice by
telecopy) and shall be given to the relevant party at its address or telecopier
number set forth below, in the case of the Borrowers, or on the appropriate
signature page hereof, in the case of the Lenders and the Agent, or such other
address or telecopier number as such party may hereafter specify by notice to
the Agent and any of the Borrowers given by United States certified or
registered mail, by telecopy or by other telecommunication device capable of
creating a written record of such notice and its receipt. Notices hereunder to
the Borrowers shall be addressed to:
Hub Group, Inc.
000 Xxxx Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section and a confirmation of such telecopy has been received
by the sender, (ii) if given by mail, five (5) days after such communication is
deposited in the mail, certified or registered with return receipt requested,
addressed as aforesaid or (iii) if given by any other means, when delivered at
the addresses specified in this Section; provided that any notice given pursuant
to Section 1 or Section 2 hereof shall be effective only upon receipt.
SECTION 11.12. CONSTRUCTION. Nothing contained herein shall be deemed or
construed to permit any act or omission which is prohibited by the terms of any
of the other Loan Documents, the covenants and agreements contained herein being
in addition to and not in substitution for the covenants and agreements
contained in the other Loan Documents.
SECTION 11.13. HEADINGS. Section headings used in this Agreement are for
convenience of reference only and are not a part of this Agreement for any other
purpose.
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SECTION 11.14. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. All rights, remedies and powers provided in this Agreement and the
other Loan Documents may be exercised only to the extent that the exercise
thereof does not violate any applicable mandatory provisions of law, and all the
provisions of this Agreement and the other Loan Documents are intended to be
subject to all applicable mandatory provisions of law which may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement or the other Loan Documents invalid or unenforceable.
SECTION 11.15 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and by different parties hereto on separate counterpart
signature pages, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
SECTION 11.16. ENTIRE UNDERSTANDING. This Agreement together with the
other Loan Documents constitute the entire understanding of the parties with
respect to the subject matter hereof and any prior agreements, whether written
or oral, with respect thereto are superseded hereby except for prior
understandings related to fees payable to the Agent upon the initial closing of
the transactions contemplated hereby.
SECTION 11.17. BINDING NATURE, GOVERNING LAW, ETC. This Agreement shall
be binding upon the Borrowers and its successors and assigns, and shall inure to
the benefit of the Agent and the Lenders and the benefit of their successors and
assigns, including any subsequent holder of an interest in the Obligations. The
Borrowers may not assign their rights hereunder without the written consent of
the Lenders. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 11.18. SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. The
Borrowers hereby submit to the non-exclusive jurisdiction of the United States
District Court for the Northern District of Illinois and of any Illinois State
court sitting in the City of Chicago for purposes of all legal proceedings
arising out of or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby. The Borrowers irrevocably waive, to
the fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought in such a court
and any claim that any such proceeding brought in such a court has been brought
in an inconvenient forum. EACH BORROWER, THE AGENT, AND EACH LENDER HEREBY
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
SECTION 11.19. CONFIDENTIALITY. Each of the Agent and the Lenders agrees
that it will use its best efforts not to disclose without the prior consent of
the Public Hub Company (other than to its employees, auditors, counsel or other
professional advisors, to Affiliates or to another Lender if the Lender or such
Lender's holding or parent company in its sole discretion determines that any
such party should have access to such information) any information with respect
to the Borrowers, the Hub Partnerships or any of Subsidiaries of the Public Hub
Company which is furnished pursuant to this Agreement; PROVIDED, HOWEVER, that
65
the Agent or any Lender may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appropriate in any
report, statement or testimony submitted to any municipal, state or
Federal regulatory body having or claiming to have jurisdiction over such Lender
or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or
similar organizations (whether in the United States or elsewhere) or their
successors, (c) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, to the extent permitted or deemed
advisable by counsel, (d) in order to comply with any law, order, regulation or
ruling applicable to the Agent or such Lender and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Lender; FURTHER PROVIDED, HOWEVER, that such
prospective transferee executes an agreement with such Lender containing
provisions substantially identical to those contained in this Section.
SECTION 11.20. NO THIRD PARTY RIGHTS. Nothing expressed or implied herein
is intended to give, or shall be construed to give, any Person, other than the
parties hereto and their permitted successors and assigns hereunder, any benefit
or legal or equitable right, remedy or claim under or by virtue of this
agreement or any under or by virtue of any provisions herein.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall constitute a contract between us for the uses and purposes
hereinabove set forth.
Dated as of this 30th day of April, 1999.
HUB GROUP, INC., a Borrower
HUB CITY TERMINALS, INC., a Borrower
HUB HOLDINGS, INC., a Borrower
QUALITY INTERMODAL CORPORATION, a Guarantor
HUB CHICAGO HOLDINGS, INC., a Guarantor
Q.S. OF ILLINOIS, INC., a Guarantor
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the above
Companies
HLX COMPANY, LLC, a Guarantor
By
Xxxxx X. Xxxxxx
Vice Chairman and
Chief Executive Officer
66
HUB CITY ALABAMA, L.P.
HUB CITY ATLANTA, L.P.
HUB CITY BOSTON, L.P.
HUB CITY CANADA, L.P.
HUB CITY CLEVELAND, L.P.
HUB CITY DETROIT, L.P.
HUB CITY FLORIDA, L.P.
HUB CITY GOLDEN GATE, L.P.
HUB CITY INDIANAPOLIS, L.P.
HUB CITY KANSAS CITY, L.P.
HUB CITY LOS ANGELES, L.P.
HUB CITY MID ATLANTIC, L.P.
HUB CITY NEW ORLEANS, L.P.
HUB CITY NEW YORK STATE, L.P.
HUB CITY NEW YORK-NEW JERSEY, L.P.
HUB CITY NORTH CENTRAL, L.P.
HUB CITY OHIO, L.P.
HUB CITY PHILADELPHIA, L.P.
HUB CITY PITTSBURGH, L.P.
HUB CITY PORTLAND, L.P.
HUB CITY ST. LOUIS, L.P.
HUB CITY TENNESSEE, L.P.
HUB CITY TEXAS, L.P.
By: Hub City Terminals, Inc.
Its: General Partner for each of the
above Partnerships as Guarantors
By
Xxxxx X. Xxxxxx
Chief Executive Officer
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Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it
should receive or obtain any payment (whether by voluntary payment, by
realization upon collateral, by the exercise of rights of set-off or banker's
lien, by counterclaim or cross action, or by the enforcement of any rights under
this Agreement, any of the other Loan Documents or otherwise) in respect of the
Obligations in a greater amount than such Lender would have received had such
payment been made to the Agent and been distributed among the Lenders as
contemplated by Section 3.5 hereof then in that event the Lender receiving such
disproportionate payment shall purchase for cash without recourse from the other
Lenders an interest in the Obligations of the Borrowers to such Lenders in such
amount as shall result in a distribution of such payment as contemplated by
Section 3.5 hereof. In the event any payment made to a Lender and shared with
the other Lenders pursuant to the provisions hereof is ever recovered from such
Lender, the Lenders receiving a portion of such payment hereunder shall restore
the same to the payor Lender, but without interest.
Percentage of Commitments:
Revolving Credit Commitment: XXXXXX TRUST AND SAVINGS BANK
$15,000,000 (30%)
Term Credit Commitment: By
$15,000,000 (30%) Name:___________________________________
Title:__________________________________
Swing Line Commitment:
$5,000,000 (100%) 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Revolving Credit Commitment: LASALLE NATIONAL BANK
$9,000,000 (18%)
Term Credit Commitment: By
$9,000,000 (18%) Name:___________________________________
Title:__________________________________
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
69
Revolving Credit Commitment: FIRSTAR BANK MILWAUKEE, N. A.
$12,000,000 (24%)
Term Credit Commitment: By
$12,000,000 (24%) Name:___________________________________
Title:__________________________________
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
70
Revolving Credit Commitment: NATIONAL CITY BANK
$7,000,000 (14%)
Term Credit Commitment: By
$7,000,000 (14%) Name:___________________________________
Title:__________________________________
00 Xxxxx Xxxxxx Xx.
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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Revolving Credit Commitment: U.S. BANK NATIONAL ASSOCIATION
$7,000,000 (14%)
Term Credit Commitment: By
$7,000,000 (14%) Name:___________________________________
Title:__________________________________
000 Xxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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EXHIBIT A-1
REVOLVING CREDIT NOTE
Chicago, Illinois
$_______________ April __, 1999
On the Revolving Credit Termination Date, for value received, the
undersigned, Hub Group, Inc., a Delaware corporation (the "PUBLIC HUB COMPANY"),
Hub City Terminals, Inc., a Delaware corporation ("HUB Chicago"), and Hub
Holdings, Inc., a Delaware corporation ("HUB HOLDINGS") (the Public Hub Company,
Hub Chicago and Hub Holdings being hereinafter referred to collectively as the
"BORROWERS") hereby jointly and severally promise to pay to the order of
________________________ (the "LENDER"), at the principal office of Xxxxxx Trust
and Savings Bank in Chicago, Illinois, the principal sum of (i)
_______________________ and no/100 Dollars ($___________), or (ii) such lesser
amount as may at the time of the maturity hereof, whether by acceleration or
otherwise, be the aggregate unpaid principal amount of all Revolving Credit
Loans owing from the Borrowers to the Lender under the Revolving Credit provided
for in the Credit Agreement hereinafter mentioned.
This Note evidences loans constituting part of a "DOMESTIC RATE
PORTION" and "LIBOR PORTIONS" and as such terms are defined in that certain
Credit Agreement dated as of April 30, 1999, among the Borrowers, Xxxxxx Trust
and Savings Bank, individually and as Agent thereunder, and the other Lenders
which are now or may from time to time hereafter become parties thereto (said
Credit Agreement, as the same may be amended, modified or restated from time to
time, being referred to herein as the "CREDIT AGREEMENT") made and to be made to
the Borrowers by the Lender under the Revolving Credit provided for under the
Credit Agreement, and the Borrowers hereby jointly and severally promise to pay
interest at the office described above on each loan evidenced hereby at the
rates and at the times and in the manner specified therefor in the Credit
Agreement.
Each loan made under the Revolving Credit provided for in the Credit
Agreement by the Lender to the Borrowers against this Note, any repayment of
principal hereon, the status of each such loan from time to time as part of the
Domestic Rate Portion or a LIBOR Portion and, in the case of any LIBOR Portion,
the interest rate and Interest Period applicable thereto shall be endorsed by
the holder hereof on a schedule to this Note or recorded on the books and
records of the holder hereof (provided that such entries shall be endorsed on a
schedule to this Note prior to any negotiation hereof). The Borrowers agree that
in any action or proceeding instituted to collect or enforce collection of this
Note, the entries so endorsed on a schedule to this Note or recorded on the
books and records of the holder hereof shall be prima facie evidence of the
unpaid principal balance of this Note, the Borrower to whom each such loan was
disbursed, the status of each such loan from time to time as part of the
Domestic Rate Portion or a LIBOR Portion, and, in the case of any LIBOR Portion,
the interest rate and Interest Period applicable thereto.
This Note is issued by the Borrowers under the terms and provisions of
the Credit Agreement and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms are defined in the Credit Agreement.
The Borrowers hereby jointly and severally promise to pay all costs and
expenses (including attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Borrowers hereby waive presentment for payment and demand. THIS NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
HUB GROUP, INC.
HUB CITY TERMINALS, INC.
HUB HOLDINGS, INC.
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the above
Companies
0
XXXXXXX X-0
XXXX XXXX
Xxxxxxx, Xxxxxxxx
$______________ April __, 1999
FOR VALUE RECEIVED, the undersigned Hub Group, Inc., a Delaware
corporation (the "PUBLIC HUB COMPANY"), Hub City Terminals, Inc. (the "HUB
CHICAGO") and Hub Holdings, Inc. ("HUB HOLDINGS") (the Public Hub Company, Hub
Chicago and Hub Holding collectively referred to herein as the "BORROWERS"),
hereby jointly and severally promise to pay to the order of __________________
(the "LENDER"), at the principal office of Xxxxxx Trust and Savings Bank in
Chicago, Illinois, the principal sum of ________________ and No/100 Dollars
($_________________), in quarterly installments and expressed to bear interest
as set forth in the Credit Agreement (as hereinafter defined).
This Note evidences the Term Loan made to Hub Holdings by the Lender
under the Term Credit Commitment provided for under that certain Credit
Agreement dated as of April 30, 1999 by and between the Borrowers, Xxxxxx Trust
and Savings Bank, individually and as Agent thereunder, and the other Lenders
which are now or may from time to time become parties thereto and the Bank (said
Credit Agreement, as the same may be amended, modified or restated from time to
time, being referred to herein as the "CREDIT AGREEMENT"), and the Borrowers
hereby jointly and severally promise to pay interest at the office described
above on such Loan evidenced hereby at the rates and at the times and in the
manner specified therefor in the Credit Agreement.
The Term Loan made against this Note, any repayment of principal
hereon, the status of such Loan from time to time as part of the Domestic Rate
Portion or a LIBOR Portion and, in the case of any LIBOR Portion, the interest
rate and Interest Period applicable thereto shall be endorsed by the holder
hereof on a schedule to this Note or recorded on the books and records of the
holder hereof (provided that such entries shall be endorsed on a schedule to
this Note prior to any negotiation hereof). The Borrowers agree that in any
action or proceeding instituted to collect or enforce collection of this Note,
the entries endorsed on a schedule to this Note or recorded on the books and
records of the holder hereof shall be prima facie evidence of the unpaid
principal balance of this Note, the status of such Loan from time to time as
part of the Domestic Rate Portion or a LIBOR Portion and, in the case of any
LIBOR Portion, the interest rate and Interest Period applicable thereto.
This Note is issued by the Borrowers under the terms and provisions of
the Credit Agreement and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement (including, without limitation, notices of default as may be required
in certain instances). All capitalized terms used herein without definition
shall have the same meanings herein as such terms are defined in the Credit
Agreement.
The Borrowers hereby jointly and severally promise to pay all costs and
expenses (including attorneys' fees) suffered or incurred by the holder hereof
in collecting this Note or enforcing any rights in any collateral therefor. The
Borrowers hereby waive presentment for payment and demand. THIS NOTE SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF
ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
HUB GROUP, INC.
HUB CITY TERMINALS, INC.
HUB HOLDINGS, INC.
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each of the above
Companies
2
EXHIBIT A-3
SWING LINE NOTE
Chicago, Illinois
$5,000,000 _________________, 1999
On the Revolving Credit Termination Date, for value received, the
undersigned, Hub Group, Inc., a Delaware corporation (the "PUBLIC HUB COMPANY"),
Hub City Terminals, Inc., a Delaware corporation ("HUB CHICAGO") and Hub
Holdings, Inc., a Delaware corporation "HUB HOLDINGS") (the Public Hub company,
Hub Chicago and Hub Holdings collectively referred to as the "BORROWERS"),
hereby jointly and severally promise to pay to the order of Xxxxxx Trust and
Savings Bank (the "LENDER"), at the principal office of Xxxxxx Trust and Savings
Bank in Chicago, Illinois, the principal sum of (i) Five Million and 00/100
Dollars ($5,000,000), or (ii) such lesser amount as may at the time of the
maturity hereof, whether by acceleration or otherwise, be the aggregate unpaid
principal amount of all Swing Loans owing from the Borrowers to the Lender under
the Swing Line Commitment provided for in the Credit Agreement hereinafter
mentioned.
This Note evidences Swing Loans made and to be made to the Borrowers by
the Lender under the Swing Line Commitment provided for under that certain
Credit Agreement dated as of April 30, 1999 between the Borrowers, Xxxxxx Trust
and Savings Bank, individually and as Agent thereunder, and the other Lenders
which are now or may from time to time hereafter become parties thereto (said
Credit Agreement, as the same may from time to time be modified, amended or
restated being referred to herein as the "CREDIT AGREEMENT"), and the Borrowers
hereby jointly and severally promise to pay interest at the office described
above on each Swing Loan evidenced hereby at the rates and at the times and in
the manner specified therefor in the Credit Agreement.
Each Swing Loan made under the Swing Line Commitment provided for in
the Credit Agreement by the Lender to the Borrowers against this Note, any
repayment of principal hereon and the interest rates applicable thereto shall be
endorsed by the holder hereof on a schedule to this Note or recorded on the
books and records of the holder hereof (provided that such entries shall be
endorsed on a schedule to this Note prior to any negotiation hereof). The
Borrowers agree that in any action or proceeding instituted to collect or
enforce collection of this Note, the entries so endorsed a schedule to this Note
or recorded on the books and records of the holder hereof shall be PRIMA FACIE
evidence of the unpaid principal balance of this Note and the interest rates
applicable thereto; PROVIDED, HOWEVER, that the failure of the Lender to record
any of the foregoing shall not limit or otherwise affect the obligation of the
Borrowers to repay all Swing Loans made under the Credit Agreement, together
with accrued interest thereon.
This Note is issued by the Borrowers under the terms and provisions of
the Credit Agreement, and this Note and the holder hereof are entitled to all of
the benefits and security provided for thereby or referred to therein, to which
reference is hereby made for a statement thereof. This Note may be declared to
be, or be and become, due prior to its expressed maturity, voluntary prepayments
may be made hereon, and certain prepayments are required to be made hereon, all
in the events, on the terms and with the effects provided in the Credit
Agreement. All capitalized terms used herein without definition shall have the
same meanings herein as such terms have in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflict
of law. The Borrowers hereby waive presentment for payment and demand. THE NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE
STATE OF ILLINOIS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
HUB GROUP, INC.
HUB CITY TERMINALS, INC.
HUB HOLDINGS, INC.
By
Xxxxx X. Xxxxxx
Chief Executive Officer for each above
Company
2
EXHIBIT B
COMPLIANCE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as Agent under,
and the Lenders party to, the Credit Agreement
described below
This Compliance Certificate is furnished to the Agent and the Lenders
pursuant to that certain Credit Agreement dated as of April 30, 1999, by and
among Hub Group, Inc. (the "PUBLIC HUB COMPANY"), Hub City Terminals, Inc., and
Hub Holdings, Inc. and certain of their affiliates and you (the "CREDIT
AGREEMENT"). Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________________________ of the
Public Hub Company;
2. I have reviewed the terms of the Credit Agreement and I have made,
or have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Hub Group during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or the occurrence of any
event which constitutes a Default or Event of Default during or at the end of
the accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below;
4. The financial statements required by Section 7.5 of the Credit
Agreement and being furnished to you concurrently with this Certificate fairly
present the consolidated financial condition of the Public Hub Company as at
said dates and the consolidated results of their operations and cash flows for
the periods then ended in conformity with GAAP applied on a consistent basis;
and
5. The Attachment hereto sets forth financial data and computations
evidencing the Hub Group compliance with certain covenants of the Credit
Agreement, all of which data and computations are, to the best of my knowledge,
true, complete and correct and have been made in accordance with the relevant
Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Hub Group has taken, is taking, or proposes to
take with respect to each such condition or event:
======================================================================
======================================================================
======================================================================
The foregoing certifications, together with the computations set forth
in the Attachment hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _________ day of
__________________ 19___.
HUB GROUP, INC.
By
Name:______________________________________
Title:_____________________________________
2
ATTACHMENT TO COMPLIANCE CERTIFICATE
HUB GROUP, INC.
HUB CITY TERMINALS, INC.
HUB HOLDINGS, INC.
Compliance Calculations for Credit Agreement
Dated as of April 30, 1999
Calculations as of _____________, 19___
---------------------------------------------------------------------------
A. NET WORTH (SECTION 7.7)
1. Net Worth, as defined $____________
2. As listed in Section 7.7 for the date
of this Certificate, Net Worth must
not be less than the Minimum
Required Amount $________
3. Company is in compliance? Yes/No
(circle yes or no)
B. FIXED CHARGE COVERAGE RATIO (SECTION 7.8)
1. Net Income, as defined for the four most
recently completed fiscal quarters ____________
2. Amounts deducted in arriving at
Net Income in respect of ____________
(a) Interest Expense, as defined ____________
(b) Federal, State and local income taxes ____________
(c) Depreciation and amortization ____________
(d) Minority Interest as defined ____________
(e) Other non-cash charges ____________
3. Sum of Lines 1 and 2 (a), (b), (c),
(d) and (e) ("EBITDAM") ____________
4. Rents, as defined for such period ____________
5. The sum of EBITDAM (Line 3) and Rents
(Line 4) ____________
6. Capital Expenditures for such period ____________
7. Restricted Payments, as defined for such
period ____________
8. The sum of Capital Expenditures
(Line 6) and Restricted Payments (Line 7) ____________
9. Interest Expense, as defined for
such period ____________
10. Cash Maturities, as defined for such period____________
11. Sum of Lines 4, 9 and 10
("FIXED CHARGES") ____________
12. Ratio of (i) the difference between Line 5 and
Line 8 to (ii) Fixed Charges (Line 8) ("FIXED
CHARGE COVERAGE RATIO") :1.00
13. As listed in Section 7.8 for the date of this
Certificate, the Fixed Charge Leverage Ratio
shall be less than 1
14. Company in compliance? Yes/No
(circle yes or no)
C. MINIMUM EBITDAM (SECTION 7.9)
1. EBITDAM for the four most recently
completed fiscal quarters (Line B3 Above) ____________
2. As listed in Section 7.9 for the date of
this Certificate, EBITDAM shall not be
less than ____________
3. Company in compliance?
(circle yes or no) ____________
2
D. CASH FLOW LEVERAGE RATIO (SECTION 7.10)
1. Total Funded Debt, as defined ____________
2. EBITDAM for the four most recently
completed fiscal quarters (from B3 above) ____________
3. Ratio of Total Funded Debt. (Line 1) to
EBITDAM (Line 2) ("CASH FLOW LEVERAGE RATIO") ________
4. As listed in Section 7.10, for the date of
this Certificate, the Cash Flow Leverage
Ratio shall not be greater than 1
5. Company in compliance? Yes/No
(circle yes or no)
3
EXHIBIT C
GUARANTEE AGREEMENT
_______________, 19___
XXXXXX TRUST AND SAVINGS Bank, as
Agent for the Lenders party to the
Credit Agreement dated as of
April 30, 1999 among Hub Group,
Inc., Hub City Terminals, Inc.,
Hub Holdings, Inc., certain
Guarantors, such Lenders and such
Agent (the "CREDIT AGREEMENT")
Dear Sirs:
Reference is made to the Credit Agreement described above. Terms not
defined herein which are defined in the Credit Agreement shall have for the
purposes hereof the meaning provided therein.
The undersigned, [NAME OF GUARANTOR], a [JURISDICTION OF ORGANIZATION]
[CORPORATION] [PARTNERSHIP], hereby elects to be a "GUARANTOR" for all purposes
of the Credit Agreement, effective from the date hereof. The undersigned
confirms that the representations and warranties set forth in Section 5 of the
Credit Agreement are true and correct in all material respects as to the
undersigned as of the date hereof.
Without limiting the generality of the foregoing, the undersigned
hereby agrees to perform all the obligations of a Guarantor under, and to be
bound in all respects by the terms of, the Credit Agreement, including without
limitation Section 10 thereof, to the same extent and with the same force and
effect as if the undersigned were a direct signatory thereto.
[INSERT THE FOLLOWING WHEN GUARANTOR IS NOT WHOLLY-OWNED]
NOTWITHSTANDING ANYTHING IN THE CREDIT AGREEMENT OR HEREIN TO THE
CONTRARY, THE LIABILITY OF THE UNDERSIGNED HEREUNDER IS LIMITED TO ___________
DOLLARS ($__________) PLUS INTEREST ON ALL LOANS HEREBY GUARANTEED PLUS ALL
COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEY'S FEES) INCURRED BY THE AGENT
OR ANY LENDER IN ENFORCING COLLECTION HEREOF.
This Agreement shall be construed in accordance with and governed by
the internal laws of the State of Illinois.
Very truly yours,
[NAME OF GUARANTOR]
By
Name:__________________________________________
Title:_________________________________________
2
SCHEDULE 5.3
SUBSIDIARIES
STATE OF % OWNED BY
ORGANIZATION INCORP. PUBLIC HUB
NAME COMPANY OTHER OWNERSHIP
HLX Company, L.L.C. Delaware 50% 50% owned by Hub Holdings
Hub Group Associates, Inc. Illinois 0% Each Hub Partnership and Hub
("HGAI") Distribution own 1 share in this
entity
Hub Chicago Holdings, Inc. Delaware 0% 100% owned by Hub Chicago
Hub Highway Services Illinois Partnership 0% Each Hub Partnership is a
partner in this entity
Hub Group Distribution Services Illinois Partnership 63.05% Hub Chicago owns 1.95% and one
individual owns the other 35%
Hub Holdings, Inc. Delaware 100%
Q.S. of Illinois, Inc. Illinois 0% 100% owned by Hub Chicago
Quality Intermodal Corporation Texas 0% 100% owned by Hub Holdings
Quality Services, L.L.C. Missouri 0% 75% owned by Hub City St. Louis,
L.P. and
25% owned by HGAI
Quality Services of Kansas, L.L.C. Kansas 0% 75% owned by Hub City Kansas
City, L.P. and 25% owned by HGAI
Quality Services of New Jersey 0% 75% owned by Hub City New
New Jersey, L.L.C. York-New Jersey, L.P. and 25%
owned by HGAI
Quality Services of Michigan, L.L.C. Michigan 0% 75% owned by Hub City Detroit,
L.P. and 25% owned by HGAI
Q.S. of Georgia, L.L.C. Georgia 0% 75% owned by Hub City Atlanta,
L.P. and 25% owned by HGAI
Hub Freight Services, Inc. Delaware 0% 100% owned by HGAI
2
PARTNERSHIPS
% owned by Jurisdiction of
Name Hub Public Company Incorporation/organization
Hub City Alabama, L.P. 100% Delaware
Hub City Atlanta, L.P. 100% Delaware
Hub City Boston, L.P. 100% Delaware
Hub City Canada, L.P. 100% Delaware
Hub City Cleveland, L.P. 100% Delaware
Hub City Detroit, L.P. 100% Delaware
Hub City Florida, L.P. 100% Delaware
Hub City Golden Gate, L.P. 100% Delaware
Hub City Indianapolis, L.P. 100% Delaware
Hub City Kansas City, L.P. 100% Delaware
Hub City Los Angeles, L.P. 100% Delaware
Hub City Mid Atlantic, L.P. 100% Delaware
Hub City New Orleans, L.P. 100% Delaware
Hub City New York State, L.P. 100% Delaware
Hub City New York-New Jersey, L.P. 100% Delaware
Hub City North Central, L.P. 100% Delaware
Hub City Ohio, L.P. 100% Delaware
Hub City Philadelphia, L.P. 100% Delaware
Hub City Pittsburgh, L.P. 100% Delaware
Hub City Portland, L.P. 100% Delaware
Hub City Rio Grande, L.P. 100% Delaware
Hub City St. Louis, L.P. 100% Delaware
Hub City Tennessee, L.P. 100% Delaware
Hub City Texas, L.P. 100% Delaware
3
